The oilseeds-to-ports Adani Group has come under the scanner of India's revenue intelligence agency as well as the Enforcement Directorate.
The Mumbai unit of the Directorate of Revenue Intelligence (DRI) has formally opened a case for alleged 'over-valuation' of capital equipment for power projects against the Gujarat-based group, widely regarded as close to Narendra Modi, BJP's prime ministerial candidate.
The agency is "investigating gross overvaluation of import of equipment and machinery by various entities of Adani Group from a UAE-based intermediary", according to an internal DRI report compiled in December.
"An amount of Rs 2,322.75 crore has been siphoned off abroad by Adani Group by resorting to over-valuation of imports in the name of various group firms," the report says.
"The companies being investigated for over-valuation of imports are PMC Projects (India), Adani Enterprises Limited, Adani Renewable Energy, Adani Hazira Port Pvt Ltd, Adani International Container Terminal Pvt Ltd and Adani Vizag Coal Terminal Pvt ltd," says the report.
The Directorate of Revenue Intelligence has summoned Vinod Shantilal Adani as well two Dubai-based individuals, Mitesh Dani and Jatin Shah.
"The Adani Group and its firms have not declared the correct value of imports and a show-cause notice is being issued under Sections 111 and 113 of the Customs Act, 1962. All top officials, including the Adanis themselves, will be questioned," said a top DRI officer.
The Adani Group declined to respond to a detailed questionnaire. But a person close to the business house claimed it was the victim of a "witch-hunt" being conducted by the Congress-led UPA government against businessmen seen as close to Modi. "We are facing extraordinary harassment. Old cases are being opened up and notices are being sent on a daily basis. In the DRI matter, no formal notice has come so far," said the person close to the group. In November 2013, the Central Board of Excise & Customs (CBEC) had reminded the Directorate General of Foreign Trade, part of the commerce ministry, to cancel import duty benefits issued to the Adani Group in 2004.
These benefits — essentially the right to import at concessional rates — were issued under the Target Plus Scheme, an export incentive which has since been discontinued. The person close to the Adani Group referred to CBEC's reminder as an example of old cases being revived.A number of DRI officials strongly defended their investigation, claiming to have unearthed substantial evidence of what they referred to as "money-laundering" by way of over-valuation of imports.
They conceded, however, that the probe was being monitored at senior levels of the government. In July 2013, CBEC, under the finance ministry, had rejected a proposal from Adani Ports and Special Economic Zone Limited to install container scanners at its own cost for conducting customs operations at Mundra Port, India's largest private port which is promoted by the Adani Group.
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