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India’s main opposition party has called for an investigation of the country’s Adani Group over allegations reported by the Financial Times that the conglomerate appeared to have inflated the cost of imported coal.
Rahul Gandhi, a leader from the Indian National Congress party, said in a press conference on Wednesday that Prime Minister Narendra Modi, with whom tycoon Gautam Adani has allegedly had longstanding ties, must “come clean, start the investigation, defend your credibility”.
The FT reported last week that customs records showed the conglomerate in the past two years used offshore intermediaries to import billions of dollars’ worth of coal at prices that were sometimes more than double market rates.
Adani, the country’s largest private coal importer, has for years faced allegations that it inflated coal costs, leading to higher electricity prices for consumers.
Gandhi said the FT’s reporting showed Adani had “taken money from the pocket of India’s people”.
“When you turn on a fan, [or when] poor people switch on a tubelight, please remember . . . the minute you press the button, the money goes into Adani’s pocket,” Gandhi said.
The Adani Group has been under scrutiny since US short seller Hindenburg Research this year accused it of stock price manipulation and fraud, calling it “the largest con in corporate history”.
The company has strongly denied the Hindenburg allegations, which prompted a sell-off in shares of listed Adani businesses that at one point cut the group’s combined value in more than half before a rebound.
Shares in Adani Enterprises, the oldest and largest of the conglomerate’s 10 listed companies, have dropped 3.8 per cent in the five days since the FT’s investigation was published. About 70 per cent of Adani Enterprises’ sales are derived from coal trading.
Opposition politicians have seized on the supposed links between Gautam Adani and Modi, attempting to turn allegations against the group into an election issue ahead of a series of polls and amid popular dissatisfaction about high inflation.
Several Indian states, including Rajasthan, Madhya Pradesh and Chhattisgarh, are heading to polls later this year ahead of national elections due in the first half of 2024. Gandhi said his party would start an investigation into Adani if it got into power next year.
While Congress is expected to put up a strong contest in some states, Modi’s Bharatiya Janata party is considered the favourite in the general elections.
India’s Directorate of Revenue Intelligence, a government body that investigates economic crimes, conducted a years-long probe into whether Adani companies had been over-invoicing for imported coal, but that investigation appears to have stalled.
The Adani Group did not immediately respond to a request for comment on Gandhi’s allegations.
The group had previously dismissed the FT report as “baseless” and “a clever recycling and selective misrepresentation of publicly available facts and information”, with a spokesperson saying that “coal procurement on long-term supply basis in India is done through an open, transparent, global bidding process thereby eliminating any possibility of price manipulation”.
The group has also accused “foreign entities” and “domestic collaborators” of launching “a series of attacks against the Adani Group with the primary intent of dragging down its market value”.
Separately, the Securities and Exchange Board of India, the country’s markets regulator, has since 2020 been probing offshore entities with holdings in Adani companies.
A Supreme Court-appointed panel said in May that the regulator had “drawn a blank”.