‘False and baseless’: Adani Group pans report on ‘low-grade’ coal supply, shares see little impact

Most Adani Group shares recovered at market close on Wednesday after a news report alleging the conglomerate had a decade back supplied low-grade coal as higher quality coal to a state government-owned power generation company.

Group flagship, Adani Enterprises, which hit a low of Rs 3,075 during trade today, closed 0.61 per cent higher at Rs 3,134.75.

Adani Ports ended at Rs 1,377.90, down 0.54 per cent, off its day’s low of Rs 1,364.35. Adani Total Gas ended 0.47 per cent higher at Rs 934.55, while Adani Energy Solutions advanced 2.33 per cent; Adani Power rose 1.68 per cent while Adani Green Energy added 0.14 per cent.

Financial Times, citing a report of the Organized Crime and Corruption Reporting Project (OCCRP), claimed that in January 2014 Adani Group bought ‘low-grade’ coal from an Indonesian company at an alleged cost of $28 a tonne.

This shipment, the report alleged, was then sold to the Tamil Nadu Generation and Distribution company (TANGEDCO) as high-quality coal for an average price of $91.91 per metric tonne.

An Adani spokesperson denied the allegations, calling them “false and baseless.”

“The suggestion that Adani Global Pte Ltd supplied to TANGEDCO inferior coal, as compared to the quality standards laid down in the tender and PO [purchase order], is incorrect,” the spokesperson said.

“While it is difficult for us to comment on individual cases due to the sheer volume of data and the elapsed time, not to add the contractual and legal obligations, it is important to note that the coal supplied, irrespective of the declaration by the supplier, is tested for quality at the receiving plant,” the company added.

Last December, the Delhi High Court directed the Central Bureau of Investigation and Directorate of Revenue Intelligence (DRI) to look into the allegations of over-invoicing of coal imports and equipment by some companies, including Adani Group and Essar Group.

“This court finds it appropriate to direct the respondents to meticulously and expeditiously look into the allegations of the petitioners to unearth actual factual position and take appropriate actions against the erring companies, if any, as per law,” the court said.

Earlier, the Adani Group had rejected the ‘over-invoicing’ charge and said the issue of overvaluation in the import of coal “was conclusively settled by India’s highest court of law”. It added the DRI’s show cause notice alleging over-valuation in the import of coal was quashed by the appellate tribunal (CESTAT). “Further, the DRI’s appeal was dismissed as withdrawn by the Supreme Court of India on January 24, 2023 with the observation that ‘we appreciate the stand taken by the government in not entering into futile litigation’.”