DRI unearths coal import scam, some big firms under scanner

A major scam, involving several energy companies and traders, has been unearthed. The case involves alleged over-invoicing of imported coal, including through a tax haven to siphon-off money abroad and charge higher power tariffs, said DRI sources.

The companies include some of the biggest names in the sector as also some state electricity boards and central power utilities that have come under the scanner of the Directorate of Revenue Intelligence (DRI). The agency has found that certain importers of Indonesian coal were artificially inflating its import value against the original price, the sources said.

The objective of over-valuation appears to be to siphon-off money abroad and to avail higher power tariff compensation based on artificially inflated cost of the imported coal, they said.

Intelligence developed by the agency further indicated that while Indonesian coal was directly imported from ports there to importers in India, the import invoices were routed through one or more intermediaries based in Singapore, Dubai, Hong Kong, British Virgin Islands among others for the purpose of artificially inflating its value.

The investigation conducted by the agency found that the inflated invoices received in India were found to have been issued by intermediary invoicing agents who appear to be either subsidiary companies of Indian importers or their front companies.

Sources said late last month the DRI had issued a ‘general alert’ to customs establishments over it coming across alleged instances of certain importers of Indonesian coal were artificially inflating their import value of coal by about 50-100 per cent.

The alleged artificially higher prices of coal were then passed on to electricity consumers, they said. The alert listed as many as 40 power generating companies and traders who allegedly inflated the procurement price of imported coal to siphon-off money abroad and avail higher power tariff compensation based on artificially inflated cost.