Three days ago, the UK newspaper, Guardian, made public excerpts of a 97-page show cause notice issued by the Directorate of Revenue Intelligence (DRI) to an Adani Group company: M/S Maharashta Eastern Grid Power Transmission Company Limited (MEGPTCL).
On 5/2/2013, DRI under UPA-II initiated an enquiry into over-invoicing on import of electrical machinery by a subsidiary of the Adani Group.
This investigation ended on 15/05/2014. The summary of this investigation:
Note: The accused MEGPTCL, a wholly owned subsidiary of Adani Enterprises Limited, an Adani Group company, is a Power Transmission Company (TransCo). For electricity to reach our homes, first the fuel is procured, then electric power generated in a plant. This power is then transmitted through a Distribution Company to our homes. So the electricity chain is: import coal --> import machinery for Generation Company (GenCo) --> import machinery for TransCo --> sell power through DisCom. The DRI investigation exposes the TransCo part of this chain. The background, as described in Michael Safi's Guardian report:
India is electricity-starved. More than 240 million Indians – enough people to form the fifth-largest country on Earth – lack access to regular power.
In the early 1990s, to encourage power companies to build electrical infrastructure, the Indian government eliminated import tariffs on technical equipment such as reactors and transformers. Profit margins on these projects increased overnight.
Adani saw the business opportunity. In 2010, the Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL), a wholly owned subsidiary of Adani Enterprises, was granted a license to develop two electricity transmission networks in the north-east of the state.
Per the DRI investigation, Adani Group routed the purchase of equipment via a front company in Dubai, thus inflating the price of equipment by nearly 400%. The ensuing profits were then transferred to a trust in Mauritius controlled by Vinod Adani.
Vinod Shantilal Adani, the elder brother of industrialist Gautam Adani, set up a firm in the Bahamas in 1993 and, shortly afterwards, "corrected the spelling" of his name to Vinod Shantilal Shah.
The Guardian article also detailed how the illicit profits were siphoned off out of India (as summarized in the DRI notice).
How much money was siphoned off by MEGPTCL? Nearly INR 1,500 crores!
The DRI notice was issued May 15, 2014. 9 days later, Narendra Modi flew from Ahmedabad to Delhi on an Adani aircraft to become India's 15th Prime Minister.
So there's a siphoning off of illicit profits by the Adani Group, who have backed the winning horse in the 2014 General Elections Narendra Modi, who then proceeds to stymie the investigation against them. The public is left to bear the cost of it all, which is where the INR 2/unit #AdaniTax comes in. It’s not only about the INR 1,500 crore; inflated invoices have a downstream impact on wheeling & generation charges:
Further, Adani Group clearly stands to profit from every part of the electricity chain ( import coal --> import machinery for Generation Company (GenCo) --> import machinery for TransCo --> sell power through DisCom). There are more dots to join - one detailed in the June 2016 issue of The Economic & Political Weekly by Paranjoy Guha Thakurta.
Thakurta also co-wrote with Aman Malik a similar article in The Wire which talked about an ongoing investigation into over-invoicing by as many as FORTY of India's biggest energy companies. A side note: Thakurta recently resigned as Editor of EPW after a defamation notice from - no prizes for guessing - Adani Group!]
Summaries of these articles from the INC Press Release:
The more you delay the adjudication process, the more the cases fade away from public memory and our collective consciousness.
Adding up all the over-valuations: in coal imported - INR 29,000 crore; in power plant machinery - INR 9,000 crore; in compensatory tariffs - minimum INR 10,000 crores!
So the INR 50,000 crore question is, how does this affect the electricity tariff charged to consumers? See the excerpts below:
To repeat: As many as 40 energy companies, including Adani Group, overvalued invoices and transferred the (inflated) cost to electricity consumers! Why should consumers foot this padded bill? Why is Narendra Modi, of na khaunga na khaane doonga fame, silent on this?
The demands made by the INC:
Immediate reduction of tariff by up to factor of ₹2/ unit wherever these companies are producing & transmitting electricity.
Immediate CBI investigation monitored by a judge of the Supreme Court into the corrupt practices of over-invoicing
The Central Electricity Regulatory Commission should investigate all private power generating entities to identify over-pricing of equipment
It is high time that Narendra Modi stopped dishing out #LalQileKeJumle and took strong action against looting of Indian public! Expose #BijliScam! Remove #AdaniTax!
Postscript: Aamjanata.com agrees it is high time Narendra Modi delivered on his repeated vows to cleanse the system of political corruption.
Press release by Ravinder Singh of the "Sabka Bharat Party" raises some pretty strong points. I am willing to publish any rebuttals made as well.
1. It is Corrupt Election Commission didn't Record Expenses Narendra Modi Election Campaign for Poll Related Expenditure which cost up to Rs.50 crores to Rs.100 crore per rally mobilizing up to a million crowd including cost of live broadcast.
2. Election Commission didn't STOP Poll Surveys as Just Modi was projected as Prime Minister candidate - WITHOUT ANY POLITICAL MANIFESTO - Election Commission Ought to have Procured 'Election Manifestos At Least Six Months in Advance' so that Electors are fully introduced to Policies of Parties Before Casting Their Votes.
3. There is No Media Coverage of Arvind Kejriwal Rally on any TV channel when Election Commission should be ensuring 'Equal Opportunity to All Candidates.'
4. But it is 'Gross Misconduct of EC to restrict a Party President with over 10 million followers to just three Cars on National Highways and that too without security cover.' Obviously distinction had to be made between National President's rally & campaign and Candidates in their own Constituencies.
5. Evidence of its Misconduct is Confirmed when Prakash Javdekar provoked BJP Cadre by Blaming Arvind Kejriwal for Lame Duck Sardar Sarovar Project.
6. It is obviously 'DEMOCRATIC SCANDAL WHEN PARTIES CAMPAIGN WITHOUT ELECTION MANIFESTO WHEN ELECTION COMMISSION SHOULD INSIST ON COMPLETE POLITICAL IDEAS OF IDEOLOGY OF REGISTERED PARTIES AT THE TIME OF REGISTRATION.'
7. Election Commission was Expected to Constitute in Advance a Supreme Court Judges Led Pannels to Monitor Lies of Parties & Ensure HONEST CONDUCT OF POLITICAL PARTIES.
It was Murder of Democracy in Gandhi's own state as Narendra Modi lies were getting Exposed one by one his rally was shown black flags and attacked by goons and detained by police. This is based on TV coverage of many channels.
Obviously BJP didn't want PRESS & MEDIA to cover the REAL DIRTY & FILTHY side of Gujarat kept hidden from public view.
Gujarat hospitals were in filthy conditions, General Hospital which is admit Emergency & Accident cases was without Orthopedic Surgeon, there no medicines, water supply in the hospital was stinking, toilets in bad conditions etc.
Arvind Kejriwal also exposed Health Centers Without Roof Not Working since built over 10 years ago and no Toilet in Schools when Schools ought to have Separate Toilets for Girls and Boys.
A Large Pond even after record rainfall season has little water may dry up in 15 days Three Months Before Monsoon.
Arvind Kejriwal was exposing lies of progress in Gujarat.
Prakash Javdekar provoked BJP workers against Arvind Kejriwal and BLAMED AAP for Stopping Sardar Sarovar Dam.
Obviosly Gujarat Was Not Serious in Building Sarsar Sarovar Dam - There was Rampant Loot in Hugely Overdesigned Narmada Canal Projects and additional Sufalam Sujalam Projects - Loot of over Rs.50,000 crores - 2013-14 Budget on Irrigation & Water Projects is Rs.12,000 crores.
Praash Javdekar didn't explain Hydro Power was Sabotaged Hydro Power all over India including Uttarakhand and Himachal Pradesh.
Prakash Javdekar also didn't explain how Adani Power Projects in much more ECO SENSITVE Zones came up without any clearances in 3-4 years.
Gandhinagar: Prakash Javadekar, a national spokesperson of the BJP, has said that Arvind Kejriwal's Aam Aadmi Party is against the Narmada project and has no right to speak on the problems of Gujarat's people.
"Anti-dam activist Medha Patkar is an official Lok Sabha candidate of the AAP," Javadekar said. "Patkar has filled a petition against the Narmada dam in the Supreme Court. If the AAP is really serious about the problems of Gujarat's people why is it not asking Patkar to withdraw her petition?'' TNN