Over-invoicing on a massive scale in the Indian coal industry is under increased investigation by India’s finance ministry and the Directorate of Revenue Intelligence (DRI).
They are looking into alleged over-invoicing of coal imports by 40 companies in both the public and private sectors that may have cost India as much as US$5 billion.
Public and private sector
Over-invoicing in the coal industry has reportedly been under investigation for at least two years, but officials are said to be stepping up their inquiries substantially.
Coal importers under investigation reportedly include private companies, Adani Group, Anil Ambani Group, JSW Steel, Essar Oil and Essar Power.
Public sector firms under investigation include MMTC, NTPC and the Tamil Nadu Electricity Board.
Sources have reportedly told the DRI that companies are artificially inflating the price of coal imports from Indonesia by as much as 100 per cent. This enables them to set higher power tariffs, because regulators approve what power companies can charge substantially on the basis of what they pay for feedstock.
But the over-invoicing has also been allegedly used as a means of siphoning off funds.
According to a DRI notice, intermediary invoicing agents in Singapore, Dubai, Hong Kong, British Virgin Islands and other jurisdictions have been issuing vastly inflated invoices on behalf of the Indian companies.
The average price of landed Indonesian coal is around $60 per tonne, but some invoices are said have shown up to double that price.
Categories: Trade Based Financial crimes News