Indian investigators seek to revive the Adani probe and request Supreme Court assistance

Indian investigators are making renewed efforts to reopen a probe into the Adani Group over allegations of coal import overvaluation. Legal documents reveal that the Directorate of Revenue Intelligence, since 2016, has been attempting to obtain transaction documents related to Adani's dealings from Singapore authorities. The agency suspects that the group's coal shipments, imported from Indonesian suppliers, were initially billed at inflated prices to its Singapore unit, Adani Global Pte, and subsequently to its Indian units.

Despite legal challenges from Adani Enterprises and its subsidiaries, led by billionaire Gautam Adani, Indian investigators have persisted in their pursuit. Adani has consistently denied any wrongdoing, asserting that Indian authorities thoroughly assessed its coal shipments before releasing them from ports.

In a recent legal filing on 9 October 2023, the revenue intelligence agency requested India's Supreme Court to overturn a previous lower court order that allowed Adani to obstruct authorities from collecting evidence from Singapore. The agency contends that it had the necessary approvals to seek information from Singapore under a mutual legal assistance treaty, dismissing Adani's claims of a lack of due process.

The Adani Group, in response, stated that it had fully cooperated with authorities, providing requested details and documents over four years ago, with no deficiencies or objections communicated by investigators thereafter.

This revived effort to investigate Adani's coal imports coincides with broader regulatory scrutiny since Hindenburg Research's January 2023 accusations of improper use of tax havens and stock manipulation. The controversy triggered a $150 billion plunge in Adani's stocks, with India's Supreme Court overseeing the market regulator's probe into Hindenburg's allegations.

Amid the fallout and in the lead-up to India's 2024 election, political opponents have intensified accusations against Prime Minister Narendra Modi's administration, alleging favoritism towards Adani in government decisions. Modi and Adani, both from Gujarat, have denied any impropriety.

The revenue agency's investigation into Adani's imports is part of a broader inquiry into 40 companies launched in 2014. The agency alleges that companies importing Indonesian coal, including Adani, were over-invoicing deliveries to tax havens and charging higher power prices in India.

The evidence sought from Singapore authorities includes transaction documents from 20 of Adani's banks, potentially establishing a financial trail in the case. If India's Supreme Court grants the agency's request, it would then need to seek an order from Singapore's Court of Appeal to release the material.

Despite hurdles and legal battles, the revenue agency remains committed to pursuing the case, with the next hearing scheduled for 6 February 2024.