Allegations of over-invoicing of imported coal by the Adani Group and others and its adverse impact on electricity consumers’ interests- Call for an independent judicial enquiry


Shri Rajiv Gauba

Cabinet Secretary

Government of India

Dear Shri Gauba,

I had earlier addressed you vide my letter of April 6, 2023 (‘) referring to prima facie evidence of several Central government agencies extending undue benefits to the Adani Group, which involved serious concerns of propriety, infringement of different laws including those that exist to safeguard the interests of the tribals, violation of the apex court’s directions in 2014 in the Coalgate case that mineral blocks should not be allotted through any procedure other than a competitive route, the adverse implications of the concessions from the point of view of the national interest (recent legislative changes to allow private mining of beach sands) and finally their long-term adverse implications for the taxpayers and the electricity consumers at large.

In my letter of October 7, 2023, addressed to the Finance Minister, with a copy marked to you (, I raised further concerns at undue dilution by SEBI in 2018 of its 2014 FPI regulations to weaken its own ability to locate beneficial ownership of FPIs at a time when there was already an ongoing investigation against the Adani Group, the Finance Ministry’s (Dept of Economic Affairs’s) relaxation of overseas investment rules in 2022 to make it easy for domestic companies to stash illicit wealth in overseas shell companies, evade taxes and possibly manipulate domestic stock market through round-tripping their funds and the Corporate Affairs Ministry deliberately not providing a definition for “overseas shell companies” in Companies Act and other relevant laws.  

I earnestly hoped that the government would get those allegations independently investigated in view of their seriousness from the public and national interest points of view. Apparently, the government has chosen not to act, for reasons best known to it, forcing me to infer that there are extraneous pressures that have preempted any such investigation. 

There are more and more allegations emerging against the Adani Group that cause further serious concern, this time about the over-invoicing of imported coal in different States to the detriment of electricity consumers. According to some estimates made in June 2022 (, coal imports have resulted in the electricity charges going up by Rs 0.70-1.00 per kWh and imposed a cost burden of more than Rs 24,000 Crores on the economy, mostly on the States. Since the Centre continues to force the States to import coal even now, the damage suffered by the States would be far greater.

The coal shortage situation has largely arisen from gross mismanagement of indigenous coal supplies on the part of the Centre. Instead of addressing it in consultation with the Ministry of Coal, the Ministry of Power compounded the problem by invoking its authority under Section 11 of the Electricity Act, 2003, somewhat irregularly, and imposed an unreasonable obligation on State utilities to meet a minimum of 10% of their coal demand through imports, allowing a field day to some domestic business houses owning overseas coal mines to take full advantage of it by over-invoicing coal supplied from those overseas mines to State power utilities and laundering funds to their overseas shell companies. There were allegations about this in the past but investigations undertaken by the Directorate of Revenue Intelligence (DRI) etc, could not make headway in the absence of necessary support from the Central government.

For one reason or the other, there has been no let up in the coal crisis as yet, allowing the Ministry of Power to continue forcing the States to import coal, which has apparently allowed business houses like the Adani Group to profit at the cost of the States.

With specific refrence to coal supplied by the Adani Group from Indonesia to domestic power plants over the last few years, an overseas news organisation, Financial Times[FT] found ( that the group used “offshore intermediaries” to import billions of dollars worth of coal at prices that were at times more than double the market price. One of the said intermediaries apparently is owned by a Taiwanese businessman who was named by FT as a hidden shareholder in Adani firms. 

While what the FT investigation has revealed may still amount only to an unsubstantiated allegation, the veracity of which needs to be investigated further, nevertheless, if the FT findings are true, it implies that the said coal importer had over-invoiced coal imports significantly, thereby overcharging the State power utilities that were forced by the Centre to import coal and, indirectly imposed an unconscionably high cost burden on electricity consumers in different States, which imported coal through the Adani companies. Such a high cost of coal also crippled the finances of the State power utilities. If it is factually correct that the coal importer had laundered illegally earned profits through intermediaries to overseas shell companies, it amounts not only to tax evasion but also accumulating wealth illegally in overseas entities and possibly manipulating the domestic stock market.. 

This is not the first time that such investigative reports appeared in the public domain on alleged irregularities associated with the Adani Group in terms of undisclosed overseas shell companies through which the Group had apparently laundered money and also manipulated the domestic stock market. A few months ago, the US short-seller, Hindenburg published a report on the subject ( . The FT itself published a report ( sometime ago on alleged overseas shell companies of the Adani Group. 

While the allegations made by Hindenburg are presently subject to judicial scrutiny, as stated earlier, the circumstances under which SEBI diluted its own well thought out FPI regulations of 2014 in 2018, when it had an ongoing investigation before it against the Adani Group, call for a closer look.

In addition, there have been reports alleging out-of-the-way favoured treatment meted out by Central government agencies since 2014 to tweak procedures to allot coal blocks to the Group and concessions granted in terms of making exceptions under environment and forest conservation laws. The relevant reports, the veracity of which needs to be investigated, are accessible at

While those investigative reports may amount only to allegations to be further examined for their factual accuracy, the fact remains that they point to favours apparently extended by the present government at the Centre to the Adani Group on several fronts, on a very large scale, and if those allegations are found to have some substance, it implies that they have caused a significant dent to the public exchequer, violated the norms stipulated by the apex court on the need to allot coal and other mineral blocks only through competitive bidding procedures and imposed a cost burden on State power utilities and electricity consumers. Those allegations are far too serious to be brushed aside.

As far as over-invoicing of coal imports is concerned, it is possible that there are several other domestic companies also importing coal from overseas mines and supplying it to State power utilities at over-invoiced prices. It is necessary to get all such coal imports investigated thoroughly.

The allegations on connivance between different agencies of the  Central government, the regulatory authorities and the Adani Group relate to a wide range of sectors of the economy and it is desirable that all such allegations are examined together through a credible system of independent investigation, in order to get clarity on the bigger picture of possible high-level collusion between different government agencies and the group. Piecemeal investigation by Central investigation agencies would not serve the purpose nor would it invoke public credibility. In my view, the only way to get those allegations enquired into would be by a high-level judicial commission, which would no doubt  take help from several Central investigating agencies such as the Income Tax Dept, Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI), Serious Fraud Investigation Office (SFIO), RBI and SEBI and exercise oversight on the same. It is important that such an enquiry is completed in a time-bound manner so as to ensure that actual facts underlying the allegations are available for the Parliament and the public to consider.

As long as there is a delay on the part of the Centre to act on the above lines, it would lend more and more credence to the above-cited allegations in the public mind. It is important that the Central government comes clean on this at the earliest so as to ensure that the trust reposed in it by the public is fully justified.

I hope that the government will act on this at the earliest.


Yours sincerely,

E A S Sarma

Former Secretary to the Government of India



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