Calls for India to re-open investigations into massive coal industry over-invoicing scam

Reserve Bank of India governor Raghuram Rajan has called for the Prime Minister’s Office to instigate a coordinated multi-agency investigation into cases of over-invoicing of imported coal and power equipment.

The alleged over-invoicing involves nearly 40 of India’s largest corporates but investigations have dragged on for years.

Poor progress

The Directorate of Revenue Intelligence investigation into the over-invoicing practices that have cost the treasury US$7.5 billion in lost tax dues is struggling to make headway.

The Central Bureau of Investigation meanwhile has completely abandoned its inquiries about alleged offences.

Under investigation

Coal importers under investigation 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.

Higher tariffs

The companies are allegedly 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 and capital equipment for power generation, transmission and distribution.


Categories: Trade Based Financial crimes News

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