Adani Group: The Organized Crime and Corruption Reporting Project (OCCRP) claimed that in dealings with an Indian state power utility, the Adani Group misrepresented low-quality coal as significantly more expensive, cleaner fuel, putting the company at the center of yet another scandal.
According to a Financial Times story published on Wednesday, OCCRP was able to get records that could provide more environmental context to the company’s already-found allegations. Since using low-grade coal for power implies burning more fuel, they believe that Adani may have fraudulently acquired enormous profits at the price of air quality, according to the research.
Invoices revealed, per the FT article, that Adani had bought a cargo of coal from Indonesia in January 2014, which was said to have 3,500 calories per kilogram. The most valuable grade of coal, 6,000 calories, was sold to the Tamil Nadu Generation and Distribution firm (Tangedco) as part of the same consignment.
According to the study, “Adani looks to have more than doubled its money in the process, after transport costs.” It also stated that Adani purchased the coal in Indonesia at a price commensurate with low-grade fuel from a mining consortium renowned for producing coal with low calorific value. It fulfilled a contract that required pricey, premium fuel by delivering the coal to the southernmost state of India for the purpose of generating electricity.
Nonetheless, the Adani group rejected the accusations. Declaring the claim of low-quality coal delivery to be “not only unfair and baseless but completely absurd,” the group informed FT that the coal had undergone “an elaborate quality check process by multiple agencies at multiple points.” At the points of loading and unloading, customs officials, Tangedco scientists, and other parties independently tested the coal’s purity. The claim that low-quality coal was given is obviously unfounded, as the coal was supplied and passed a rigorous quality check process conducted by several agencies at different periods in time.
Tangedco was the ultimate purchaser in all 22 shipments, with an average cost per tonne of $86; the FT matched 22 of the 24 voyages with filings from India. According to the report, the pricing is consistent with Argus’s estimations of the local market rates, which ranged from $81 to $89, including freight charges, for high-grade, 6,000-calorie coal.
In response, Adani stated that it could never, under any circumstances, be held accountable for air pollution or the losses of India’s state-owned power distribution firms, given that its Singapore unit supplied less than 2% of the coal used by Tangedco during the relevant time.
By Wednesday’s end of trading hours, shares of the Adani Group companies had bounced back. Adani Enterprises, the flagship company, saw intraday trading as low as Rs 3,075 before closing 0.6% higher at Rs 3,134.75.
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