India’s Directorate of Revenue Intelligence (DRI) is investigating twelve private and public sector power companies for allegedly inflating the value of equipment imports from China and South Korea by billions of US dollars.
“The power equipment import scam adds up to US$8-10 billion, with a total value of power equipment imported by the companies shown up to US$15 billion,” a senior customs department official told Indian media.
The over-invoicing of power machinery imports is not limited to two or three companies. There are several big companies who practise this mechanism to siphon off huge money outside.
The government is losing billions of dollars of foreign exchange every year due to the scam,” the official added.
The DRI has already served notice on Essar Power Gujarat Ltd (EPGL) and Essar Power Madhya Pradesh Ltd (EPMP).
The directorate’s notice alleges that the total value declared for the goods imported was the equivalent of nearly US$1.5 billion whereas the actual value was just short of US$1.1 billion.
According to DRI sources, equipment imports from China are shipped direct to Essar in India but the manufacturers’ invoices are routed through an intermediary, an Essar-owned entity in the UAE called Global Supplies.
The DRI alleges that Global Supplies inflated the value remitted by the Essar Group while the UAE-based entity remitted the actual value to the main manufacturer and retained the excess cash.
The DRI says its probe has found inflated invoices for equipment dated between 2009 and 2013.
Categories: Trade Based Financial crimes News