Adani Group gets Rs5,500 cr DRI show-cause for fudging imports
19 May 2014
The Directorate of Revenue Intelligence (DRI) has slapped a show-cause notice on the Adani group asking why it should not pay Rs5,500 crore for alleged over-valuation of capital equipment imports.
The show-cause notice was issued by the Mumbai office of DRI late last week. Reports said the notices were issued against three companies of the Ahmedabad-based Adani Group for alleged over-valuation by Rs2,000 crore of capital equipment for its power projects.
"We have issued show-cause notices to three Adani Group power companies and are expecting their replies soon," a DRI source told PTI.
With over 10,000 MW of generation, Adani Power is the largest private power producer in the country. It is also the largest ports operator in the country, with its Kandla Port overtaking Mumbai's Jawaharlal Nehru Port Trust (JNPT) last year.
The DRI notices were issued to the Gautam Adani-promoted group companies- Adani Power Maharashtra, Adani Power Rajasthan, Maharashtra Eastern Grid Power Transmission Company, as well as to a contractor to the last entity.
A spokesman for the Adani Group confirmed receiving the DRI notice and said that they are evaluating it and seeking legal advice.
According to DRI officials, the notice followed the investigation by the agency, wherein they were probing over-valuation of import of machinery and equipment by various Adani Group firms from an Emirates-based company.
Last November, the Central Board of Excise & Customs had reminded the directorate general of foreign trade to cancel import duty benefits issued to the Adani Group in 2004.
Adani Group on 16 May announced the purchase of the Dhamra Port in Odisha from Tata Steel and Larsen & Toubro for Rs5,500 crore.
On Saturday, the group flagship Adani Enterprises had reported a six-fold rise in March quarter net income at Rs2,847.82 crore, boosted by gains from compensatory tariff for its arm Adani Power. Its income increased to Rs16,171 crore as against Rs11,512.9 crore in the corresponding period the previous fiscal.
