Adani companies facing multiple financial crime, corruption probes – ABC News (Australian Broadcasting Corporation) types of anti money laundering

Key points:

• two separate investigations into allegations of trade-based money laundering by adani companies underway

• federal government considering granting adani a $1b subsidy to build a railway

• adani denies wrongdoing

Companies under scrutiny for the alleged corrupt conduct include adani enterprises limited — the ultimate parent company of the massive mine planned for the galilee basin.

Two separate investigations into allegations of trade-based money laundering by adani companies are underway — one into the fraudulent invoicing of coal imports and the other into a scam involving false invoicing for capital equipment imports.

They are very serious allegations and they are being conducted by the premier indian government agency investigating financial crime, australia’s foremost expert on money laundering, professor david chaikin of the university of sydney, told the ABC.Types of anti money laundering

The allegations involve substantial sums of money with major losses to the indian taxpayer.

Adani denies wrongdoing.

The modus operandi of the claimed fraud is outlined in a circular issued by india’s directorate of revenue intelligence, which was obtained by the ABC.

Intelligence obtained by the directorate of revenue intelligence indicated that certain importers of indonesian coal were artificially inflating its import value as opposed to its actual value, professor chaikin said.

The objective … appears to be two-fold: (i) siphoning off money abroad and (ii) to avail higher power tariff compensation based on [the] artificially inflated cost of the imported coal. Adani enterprises ltd accused of bribery of public officials

Sorry, this video has expired video: do you know how adani’s complex corporate web is controlled?

(ABC news)

Five adani group companies are among a number of power companies named in the circular as under investigation.Types of anti money laundering

These include adani enterprises ltd, the ultimate parent company of the adani entity, which holds the environmental approvals for the planned carmichael coal mine and a railway to the mine.

Adani enterprises ltd has also been accused of involvement in large-scale illegal iron ore exports and bribery of public officials.

According to a 2011 report by the ombudsman of the indian state of karnataka, obtained by the ABC, police seized documents from adani enterprises in raids which indicate that money has been regularly paid to port authorities, customs authorities, police department, mines and geology and even to mlas/mps.

The revelations come as the federal government considers granting adani a $1 billion subsidy to build a railway from the abbot point coal terminal to the mine site 400 kilometres inland.

Audio:

Matt canavan accuses ABC of publishing fake news

types of anti money laundering

(AM)

The ABC asked the government’s NAIF, which has an application from adani for the subsidised, non-commercial loan, whether it was appropriate to consider it when adani companies were facing multiple fraud allegations.

It also asked NAIF how it could conduct proper due diligence for the loan when the adani companies in australia, established for the rail project, were ultimately owned by a private company in the cayman islands, a secretive tax haven, as the ABC revealed yesterday.

NAIF did not respond.

When senator canavan was asked on AM whether he was aware of the investigations into adani, he said he was seeking advice.

I’ve asked my department for advice about it. As your story indicated there are no findings at this stage on this investigation, he said.

It’s not unusual, of course, for tax authorities and others to investigate large companies, as it happened in this country with many companies and has involved large settlements with the australian taxation office.Types of anti money laundering

But I don’t know the status of these allegations apart from the fact that they remain allegations.

However, professor chaikin said adani’s loan application should be put on ice until it is cleared of wrongdoing.

No australian bank or financial institution or government should finance any transaction where there are allegations of financial impropriety or crime on foot, professor chaikin said.

They should wait until those investigations are concluded before they complete their due diligence process and decide whether to make a loan. Team examining alleged fraud by indian adani power company

Ariane wilkinson, a lawyer for legal team environmental justice australia, said the proposal was seriously concerning for a range of reasons.

Not least of which is that the companies that will be applying for the loan, whether it is adani mining or one of the other companies owned in the cayman islands, are connected through their parent companies to allegations of fraudulent invoicing and trade-based money laundering, she said.Types of anti money laundering

Adani’s complex web adani’s complex corporate web spreads from its planned galilee basin coal mine in north queensland, across asia to a caribbean tax haven.

A supreme court appointed special black money investigation team is examining an alleged fraud by adani power companies in india.

The companies have also been accused of siphoning off money in a fraud that used inflated invoices for capital equipment imports to shift funds offshore via intermediaries created in a tax haven zone of the united arab emirates and in mauritius.

Companies that own the port and planned railway for adani’s carmichael coal mine are linked to the alleged fraud via a director.

Directorate of revenue intelligence documents — cited in news company indian express — state that the mauritius intermediary company, electrogen infra holdings pvt ltd, is controlled and managed by vinod shantilal shah, alias vinod shantilal adani.Types of anti money laundering

Vinod adani is believed to be the sole director of one of the companies who have allegations against them of fraudulent invoicing, ms wilkinson said.

He’s also the sole director of companies in singapore, who are the ultimate owners of the australian adani entities, who own the port and the rail for the mine.

Company searches by the ABC confirm that vinod adani is sole director of the singapore parent companies.

The ABC has tried to reach vinod adani for comment. Allegations are ‘far-fetched’ from laws of the land

An adani group spokesman told the ABC the import of all goods were made under internationally competitive bidding processes.

More on this story:

• adani’s mega mine neither viable nor justified, says energy analyst

• what we know about adani and the carmichael mine project

• india’s plan to step away from coal casts doubt on adani mine

• adani’s $2 billion queensland rail line closer to federal loan

types of anti money laundering

Reputed consultants evaluated bids received and the lowest bidder was allocated the final contract, the spokesman said in a statement to the ABC.

The process was evaluated by the regulated authorities and financial institutions.

So these are baseless allegations and far-fetched from the laws of the land.

Aside from shifting money offshore, the impact of the alleged fraudulent invoicing has been to push up power prices for indian people.

There is an irony, institute for energy economics and financial analytics director tim buckley said.

Our government is saying that we need to export coal in order to alleviate indian energy poverty and yet at the same time the indian government is charging that adani has been inflating the price of coal imports at the expense of the indian people through higher electricity prices.

Topics: coal,

Business-economics-and-finance,

types of anti money laundering

Mining-industry,

Multinationals,

Federal-government,

Tax,

India,

Australia,

Qld,

Mackay-4740,

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First posted

December 22, 2016 05:44:52

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