Rahul Gandhi targets Adani again, this time based on a report by Financial Times and data from Soros-backed OCCRP (Image Source: TV9)
On May 22, senior Congress leader and former president Rahul Gandhi brought Adani into the debate to criticise the Modi government in light of a recent Financial Times report accusing the group of a ‘scam’ involving the sale of low-grade coal as high-value fuel.
Tweeting in Hindi, Gandhi claimed a ‘big coal scam’ has emerged under the BJP government.
“Through this scam ongoing for years, Modiji’s favourite friend Adani has looted thousands of crores by selling low-grade coal at triple the price, a cost borne by the common people through expensive electricity bills. Will the Prime Minister explain how many vehicles were used to keep ED, CBI, and IT silent on this blatant corruption?” tweeted Gandhi, asserting that the INDI government will investigate this massive scam and recover every penny taken from the public once it assumes power after June 4.
The Financial Times (FT) article titled “Adani suspected of fraud by selling low-grade coal as high-value fuel” appears to target the Indian conglomerate with allegations of fraud involving coal sales from Indonesia to India. Notably, the Financial Times has not provided evidence to support its claim of fraud by the Adani Group and has now hide the report using paywalls.
While Gandhi embraced the FT allegations without verifying the details, the article mentions suspicions arising from January 2014, wherein invoices for an Indonesian coal shipment with 3,500 calories per kilogram, were purchased by Adani.
The report implies that this alleged scam occurred in January 2014. The period of UPA-II when Manmohan Singh was Prime Minister.
Interestingly, the transaction involved the Adani Group and the Tamil Nadu Generation and Distribution Company (Tangedco), with Adani accused of selling 3,500 calories per kilogram of coal as 6,000 calories per kilogram, a much more valuable grade.
The alleged scam period was from 2012-2016 and it took place in Tamil Nadu.
During the period in question, the Manmohan Singh-led UPA government was at the helm at the centre in 2012 and January 2014, while Tamil Nadu was governed by the AIADMK under Chief Minister J. Jayalalithaa.
Jayalalithaa’s tenure spanned from 2011 to September 2014, and again from May 2015 to May 2016, with a brief interlude when Paneerselvam served as chief minister. It’s crucial to note that the BJP was not in power either at the Centre in January 2014 or in Tamil Nadu from 2012 to 2016, the period during which the alleged coal sales scam involving the Adani Group occurred.
In his tweet, Rahul Gandhi alleged that the scam took place under the Modi government.
However, Prime Minister Modi did not assume office until June 2014, several months after the Indonesian coal sale invoices were issued in January 2014. Modi’s election victory came after defeating the UPA-II government, which had been plagued by multiple corruption scandals, policy paralysis, and chronic misgovernance.
Despite the Financial Times’ report failing to substantiate claims that the January 2014 coal sale by the Adani Group to a Tamil Nadu company was a scam, let alone one under the Modi government’s watch, Rahul Gandhi quickly seized upon the controversy without examining the details and timeline. This underscores his disregard for facts and his tendency to make self-damaging statements.
The Financial Times report stated that it obtained transaction documents between a ship carrying Indonesian coal and the Adani Group from the Organised Crime and Corruption Reporting Project (OCCRP).
OCCRP, backed by George Soros, is part of a network of organisations often accused of targeting the Adani Group and other Indian business interests. Established in 2006, OCCRP claims to have a global network of journalists specialising in organised crime and corruption reporting.
It is perceived by some as a front for George Soros and his Open Society Foundations to influence civil society and shape public opinion across various countries. A glance at OCCRP’s India page reveals a consistent effort to portray Prime Minister Narendra Modi negatively, depicting him as a ‘demagogue’ and an ‘electoral autocrat,’ and spreading alarm about the state of democracy in India, often echoing the views of dubious fact-checkers like Alt News.
The Adani Group has been the focus of numerous attacks by Western organisations and media, especially following Rahul Gandhi’s accusations that PM Modi favoured the conglomerate, typically without evidence.
Last year, Hindenburg Research launched an attack on the group, causing a sharp decline in Adani Enterprises’ stock price. However, the stock has since recovered and is trading near its all-time high, reflecting the group’s strong financial health.
Similarly, in March 2023, the Financial Times published an article alleging that the Adani Group’s foreign direct investment stemmed from offshore entities linked to the Adani family. The Adani Group dismissed these allegations, calling them a “mendacious, deliberate effort to paint the Adani Group and the Adani family in the worst possible light.”
In a statement, the Adani Group responded, “Our assertion to your reporter that all the transactions in question have been publicly disclosed is accurate. The story clearly shows that your reporters chose not to thoroughly examine these public disclosures or related press releases, including those covered by the Financial Times at the time.”
According to OCCRP, at least 25 shipments of low-quality coal, priced as such, arrived at Tamil Nadu’s coast between January and October 2014. The Adani Group allegedly sold this coal to the state power company for three times the original price, as per documents.
OCCRP’s investigation highlighted one shipment, in particular, carried by the vessel M V Kalliopi L, which reached Chennai from Indonesia on January 9, 2014, with 69,925 metric tons of coal for Tamil Nadu’s power company. The paperwork for this shipment reportedly took a convoluted route through the British Virgin Islands and Singapore. During this journey, the coal’s price allegedly tripled to 91.91 dollars per metric ton, and its quality was upgraded from low-grade steam to high-quality fuel.
OCCRP stated that their evidence, sourced from invoices, banking documents, India’s Directorate of Revenue Intelligence (DRI) investigations, Tamil Nadu Generation and Distribution Corporation (TANGEDCO) documents, and leaks from an Indonesian coal supplier for Adani, suggests the Adani Group over-invoiced coal prices.
This alleged overpricing impacts ordinary Indian citizens, who face inflated fuel costs and contributes to pollution, which, according to a Lancet study, caused over 1.6 million deaths in India in 2019.
OCCRP also reported that Arappor Iyakkam, a Tamil Nadu-based NGO advocating accountability in this alleged coal scam, estimated that TANGEDCO overpaid Rs 6,000 crore for coal from all vendors between 2012 and 2016. Adani accounted for half of these tenders, according to the power company.
An Adani spokesperson, however, labelled OCCRP’s findings as “false and baseless.”
They stated, “The suggestion that Adani Global Pte Ltd supplied inferior coal to TANGEDCO, contrary to tender and purchase order quality standards, is incorrect.” The spokesperson emphasised the difficulty of commenting on individual cases due to the volume of data, elapsed time, and contractual obligations, but assured that the supplied coal underwent quality testing at the receiving plant.
The Adani Group also refuted Iyakkam’s analysis and denied responsibility for air pollution or state power companies’ losses. “Adani Global Pte Ltd, supplying less than 2 per cent of the coal burned by TANGEDCO in the relevant period, cannot be held responsible for air pollution or power distribution companies’ losses,” the spokesperson added. They clarified that shipments were tested for quality at multiple points during the process.
“If the delivered coal was of inferior quality than stipulated, payments would be reduced accordingly. The contract allowed for a range between 5,800 and 6,700 kcal/kg,” the spokesperson explained.
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