Delhi HC Puts CBI in a Spot over Probe into Rs 30,000 Cr Coal Import Over-Invoicing

The Delhi HC has asked the CBI to explain why it closed the preliminary inquiry even as the Directorate of Revenue Intelligence was still probing these cases.

New Delhi: Stalled probes into the alleged Rs 30,000 crore coal import invoicing scam involving top corporate houses like Adani group, Reliance Infrastructure and Essar Power are back in the spotlight, with the Delhi high court asking the Central Bureau of Investigation (CBI) to explain why it closed the preliminary inquiry even as the Directorate of Revenue Intelligence (DRI) was still probing these cases.

The next hearing in this case is scheduled on May 1. The  court has also asked the government to respond to its notice.

Significantly, on a petition filed separately by social activist Harsh Mander, the finance ministry has given an undertaking to the Delhi high court in March this year that it will pursue all over-invoicing cases to their logical conclusion.

The DRI has also filed a detailed affidavit in the court blaming PSU banks for not cooperating in the over-invoicing probe. The agency had closed its investigation into the scam when Ranjit Sinha was at its helm.

Sources said the court’s order could put the CBI in a difficult situation. The CBI has only filed a First Information Report (FIR) against NTPC in the coal import scam that happened during 2008 to 2010 and avoided a probe against the major corporates involved in over-invoicing, petitioner Prashant Bhushan told the court.

As many as 40 companies are under the DRI scanner for alleged over-invoicing of coal import scam between 2008 and 2010. In its initial probe, the DRI found that all companies adopted a common modus operandi for overvaluing price of imported coal, which was meant to launder money but also increased power costs for consumers.

Bhushan brought to the court’s notice that the CBI had registered a PE in the scam after DRI issued a notice to Adani Group, which accounted for major share in over-invoiced coal import. He also pointing out that the Supreme Court is still probing the conduct of Sinha for meeting many corporate lobbyists, including Anil Ambani’s Reliance Group’s Tony Jesudasan and Sethu Raman, at his residence.

Most of corporate lobbyists who visited Sinha at his residence were from companies accused in either 2G case or were under scanner for over-invoicing of coal and power equipment imports.

Companies had over-invoiced their import bills by routing them to shell firms in Hong Kong, British Virgin Islands and Dubai.  The bills were passed through PSU banks including SBI’s foreign branches.

Bank of Baroda, UCO Bank and private bank ICICI Bank’s foreign branches were used by the shell firms for inflating import bills.

As much as 70% of the transactions were passed through SBI’s foreign branches. Bhushan also pointed out that DRI’s adjudication wing has given clean chit to Adani Group companies in coal scam.

The DRI has informed the court that there are 17 cases of over-invoicing of imports wherein the process of getting Letter Rogatories (LRs) have  been completed and LRs are under due process in overseas courts. There are two cases where applications seeking issuance of LRs are pending before Indian courts. There are nine cases where process is on to file applications in courts seeking issuance of LRs, the DRI affidavit said.

It further said that though investigation is complicated and time-consuming  due to voluminous nature of these requests and multiplicity of countries, the DRI is taking all steps to ensure their expeditious completion.