The customs intelligence agency has asked the CBI to take “appropriate action under law” against the two firms for alleged overvaluation of imported coal.
The Directorate of Revenue Intelligence (DRI) has asked the Central Bureau of Investigation to probe two Reliance firms for alleged overvaluation of imported coal from Indonesia between 2010 and 2015.
According to a report in the Indian Express, the DRI, in a letter dated December 21, 2018, asked the CBI to take “appropriate action under law” against two Reliance ADAG firms — Reliance Infrastructure Ltd and Rosa Power Supply Co Ltd – for siphoning off close to Rs 386 crore by overvaluing at least 73 consignments of imported coal.
While the CBI has not registered a preliminary enquiry in the case yet, it could potentially take up instances of violations of the Indian Penal Code (IPC).
The CBI is currently probing, on the advice of the DRI, two other companies, Coastal Energy Pvt Ltd and Knowledge Infrastructure Systems Pvt Ltd, for allegedly inflating prices of imported coal from Indonesia.
The customers intelligence agency is also currently probing close to 40 other companies for alleged over-valuation of imports of Indonesian coal pegged at Rs 29,000 crore.
In its letter to the CBI, the DRI also summarised the manner in which the import invoices of Indonesian coal were inflated by routing them through one or more intermediaries based in Singapore, Hong Kong, Dubai and the British Virgin Islands to artificially inflate their value and help power companies in getting increased tariffs for their generating stations.
The DRI found that the inflated import invoices received in India were issued by intermediaries, that were purportedly fronts of subsidiary companies of Indian importers.
The DRI has apparently also alleged that most of the imported coal was supplied to Reliance Infrastructure’s Dahanu power generation plant in Maharashtra, which supplies power to suburban Mumbai, and Rosa Power plant in Uttar Pradesh.
In the showcause notice issued by the DRI to Reliance Infrastructure and Rosa Power in August 2016, the two firms not only violated the Customs norms but also violated other laws like the Electricity Act, 2003, Income Tax Act, 1961, Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, Companies Act, 2013, and Securities and Exchange Board of India Act, 1992.
The Wire has sent an email to a Reliance Infrastructure spokesperson asking for comment and this story will be updated if and when it is received.