India’s prominent business conglomerate, the Adani Group, has come under scrutiny following accusations of selling coal at inflated prices. These allegations, reported by the Organized Crime and Corruption Reporting Project (OCCRP), involve complex international transactions and a significant markup on coal prices. On January 9, 2014, the bulk carrier MV Kalliopi L docked at Ennore port in Chennai, Tamil Nadu, after a two-week voyage from Indonesia. It was carrying 69,925 metric tons of coal intended for the state’s power company, TANGEDCO (Tamil Nadu Generation and Distribution Corporation). However, the paperwork associated with this shipment reveals a convoluted journey through the British Virgin Islands and Singapore, during which the price of the coal more than tripled from its initial cost.
Documents obtained by OCCRP, and shared with the Financial Times, show that this incident was not isolated. At least 24 other shipments that arrived on Tamil Nadu’s coast between January and October 2014 followed a similar pattern. These shipments were initially priced as low-quality coal but were eventually sold by Adani Group to TANGEDCO at a significantly higher cost. This practice has raised serious concerns about over-invoicing and misrepresentation of coal quality.
The evidence supporting these allegations comes from a variety of sources, including invoices, banking documents from several jurisdictions, details of investigations by India’s Directorate of Revenue Intelligence (DRI), leaked documents from an Indonesian coal supplier, and records from TANGEDCO. This data adds substantial weight to longstanding over-invoicing allegations against the politically influential Adani Group, which is perceived to have close ties with Prime Minister Narendra Modi. The Adani Group is also India’s largest importer and private producer of coal.
Nearly a decade ago, the DRI, an agency under the Ministry of Finance, began investigating whether Adani Group and other companies used offshore intermediaries to inflate the price of coal supplied to Indian utilities. However, progress on this probe was halted in 2019 when Adani won a case in the High Court of Bombay that blocked the DRI from seeking detailed shipment information from abroad. The DRI then appealed to India’s Supreme Court, where the case has since languished without significant progress.
In 2023, opposition politicians renewed calls for an investigation after the Financial Times reported that the Adani Group appeared to have paid over $5 billion to middlemen for coal imported at prices far exceeding market rates between 2021 and 2023. The alleged overpricing not only places a financial burden on ordinary Indians but also exacerbates pollution problems, as burning lower-quality coal results in more emissions. A study published in The Lancet highlighted that pollution contributed to over 1.6 million deaths in India in 2019.
Tim Buckley, founder and director of Australia-based Climate Energy Finance, emphasized the broader implications of these practices. “The implications are that you have overpaid for the fuel, and you need to burn more coal for every unit of electricity you produce, resulting in more fly ash and more pollution,” Buckley explained. This, in turn, contributes to more energy poverty for the poorest in India.
Arappor Iyakkam, a Tamil Nadu-based NGO advocating for accountability in the alleged coal scam, estimates that TANGEDCO overpaid Rs 6,000 crore (approximately $720 million) for coal from all vendors between 2012 and 2016, with nearly half of this amount attributable to Adani. The NGO filed a complaint against TANGEDCO in 2018 with the state anti-corruption agency, highlighting the need for thorough investigation and accountability.
Responding to OCCRP’s findings, an Adani spokesperson denied the allegations, calling them “false and baseless.” The spokesperson stated that the suggestion Adani Global Pte Ltd supplied inferior coal to TANGEDCO was incorrect. “While it is difficult for us to comment on individual cases due to the volume of data and the elapsed time, it is important to note that the coal supplied is tested for quality at the receiving plant,” the spokesperson added. Furthermore, the spokesperson rejected Arappor Iyakkam’s analysis and any responsibility for India’s air pollution or the financial losses incurred by state power companies, noting that Adani Global Pte Ltd’s supply constituted less than 2% of the coal burnt by TANGEDCO during the relevant period.
Documents obtained by reporters track the price and quality changes of the coal imported by Adani as it moved between companies. Shortly after the vessel began its journey, a provincial office in the Indonesian port city of Banjarmasin issued a certificate of origin in January 2014, identifying the Indonesia mining group Jhonlin as the consignor and TANGEDCO as the consignee. The certificate did not mention the calorific value of the coal, which measures the energy produced when coal is burned and indicates its quality. However, leaked data from Jhonlin listed the price for this shipment at $28 per metric ton, aligning with the market value for low-end coal at that time.
Before reaching TANGEDCO, the paperwork for the shipment passed through Supreme Union Investors Ltd, a company registered in the British Virgin Islands. This company issued an invoice for the shipment to Adani Global PTE Singapore, listing the unit price as $33.75 per metric ton and the quality as “below 3500” kilocalories per kilogram (kcal/kg), which is considered low grade. However, when Adani Global invoiced TANGEDCO for the shipment a month later, the unit price had dramatically increased to $91.91 per metric ton, and the coal was listed as having a calorific value of 6,000 kcal/kg, a high-quality form relatively free of impurities.
Reporters verified that two dozen other coal deliveries from 2014 followed the same pattern, with Adani earning significant margins on each shipment. According to leaked data from Jhonlin, the Indonesian miner initially supplied shipments to Supreme Union Investors for an average price of $28 per metric ton, consistent with low-end bulk steam coal. However, TANGEDCO records show these shipments were ultimately supplied by Adani under the contracted quality of 6,000 kcal/kg and at a price of $91 per metric ton.
Although not all original invoices were obtained, reporters confirmed the 24 shipments matched in export and import datasets by correlating ship names, weights, and shipment dates. In response, an Adani spokesperson insisted that the shipments underwent quality checks at multiple points. “With the supplied coal having passed such an elaborate quality check process by multiple agencies, the allegation of supply of low-quality coal is not only baseless but completely absurd,” the spokesperson stated.
Jhonlin, primarily known as a supplier of low and medium-grade steam coal, did not respond to questions from OCCRP. Data from Jhonlin, including more than two million documents between 2012 and 2022, showed no instances of the company supplying coal with a calorific value above 4,200 kcal/kg — significantly lower than the 6,000 kcal/kg coal TANGEDCO ordered. Adani’s spokesperson claimed that any delivery of lower-quality coal than stipulated would have resulted in reduced payment. However, Financial Times journalists found that the final payment price for the identified shipments varied between $87 and $91 per metric ton, indicating minimal adjustments, if any.
Indian analyst Rohit Chandra, an assistant professor of public policy at IIT Delhi, noted that power generators in India have long faced coal quality issues. “Given the market power of coal suppliers, they often don’t have a choice but to accept grade slippage,” Chandra explained, highlighting that third-party testing has done little to address these concerns.
The allegations against Adani Group involve significant overpricing and misrepresentation of coal quality, leading to financial burdens on Indian consumers and increased pollution. While Adani denies these claims, the evidence presented by OCCRP and other sources raises serious questions about the company’s practices and the need for thorough investigation and accountability.
