The mining conglomerate is asking the court to quash a request to produce information regarding its coal imports from Indonesia
Mining conglomerate the Adani Group is trying to prevent Indian authorities from accessing its business records as part of an investigation into an alleged $4bn fraud by power companies.
Lawyers for Adani on Tuesday filed a plea asking the Bombay high court to quash a formal request by Indian investigators to Singaporean authorities to force the company to produce information regarding its coal imports from Indonesia.
The request is part of an investigation by Indias Directorate of Revenue Intelligence (DRI) into a $4.4bn alleged fraud by 40 power companies including six Adani subsidiaries.
According to DRI documents, the companies allegedly used fake middlemen to inflate the price of coal they were importing from Indonesia. The scheme allowed the companies to charge higher tariffs by exaggerating their production costs, the DRI claimed.
If true, the alleged scam would also have allowed the companies to siphon billions of dollars from India into offshore bank accounts where Indian authorities would struggle to tax or account for the money.
Adani and the other energy companies named by the DRI, including Essar and the Anil Dhirubhai Ambani Group, have denied any wrongdoing. Adani has been contacted for comment about the Bombay high court legal challenge.
The company has been working to build one of the worlds largest coalmines in Australia and has had to pass several Australian state and federal government probity tests to secure licences to mine.
It recently cleared one of its last Australian legal hurdles, overcoming a legal challenge by Indigenous groups who claim the company has not sought their consent for the project. But it still requires a loan to build a rail link between the mine and a coal port at the Galilee Basin.
The Bombay high court challenge is the third attempt by Adani to prevent Indian investigators from gaining access to its records regarding the Indonesian imports.
The DRI in 2016 petitioned the governments of Singapore, Dubai and Hong Kong for assistance in gaining access to the overseas bank records of state-owned Indian banks whose accounts were allegedly used to facilitate the scam.
Adani challenged that request in Singapore lower court, which disagreed and ordered the company to turn over its records. Adani appealed against the order in the Singapore high court but was ruled against earlier this month.
It is now trying to challenge the Indian authorities request in the Bombay high court.
Adani has been fighting separate allegations for the past four years that it used a shell company in Dubai to siphon hundreds of millions of dollars from the companys books into Adani family tax havens overseas.
In August 2017, the Guardian published extensive details of the financial fraud allegations collected by the DRI. Shortly after the publication of the evidence, an Indian official appointed to review the case dismissed the accusations.
The company says it strongly denies the allegations. It is a standard procedure for the group to follow international competitive bidding route for major capital expenditures to ensure transparency and competitiveness in the process, it said in an earlier statement to the Guardian. All our transactions are always conducted within the framework of extant regulatory guidelines and provisions.
Indias customs department is appealing against the dismissal, arguing the order clearing Adani was biased towards the company and poorly reasoned. The case is yet to be heard.
Hearings in the Bombay high court case are expected to begin next month.