The CBI has begun a probe into an alleged scam of Rs 487 crore related to over-valuation of inferior quality of coal imported from Indonesia which was passed on to NTPC and Aravali Power Corporation as superior quality in collusion with officials.
The action of the agency came on the basis of a Directorate of Revenue Intelligence investigation which had shown over-invoicing in the imports between 2011-12 and 2014-15, officials said today.
The CBI FIR is against Ahmed A R Buhari, promoter of Coastal Energy Private Limited, Chennai and unidentified officials of National Thermal Power Corporation, Metals and Minerals Trading Corporation, Aravali Power Company Pvt Ltd.
The agency booked them under the charges of criminal conspiracy cheating and provisions of Prevention of Corruption Act, the officials said.
According to the modus operandi given in the FIR, the NTPC and Aravali Power Corporation Limited had floated global tenders for the supply of imported coal of a certain grade and quality.
The grade and quality of the coal are crucial for achieving certain levels of power plant operations.
The MMTC, a PSU and Chennai-based Coastal Energy Private Limited, emerged successful bidders for the supply of coal.
The CEPL instead of importing coal from Indonesia directly, routed their supply through Dubai-based sister concerns, enabling them to manipulate invoiced and quality certification.
It is alleged that they entered into a criminal conspiracy to cheat the government by importing coal of Indonesian origin by fraudulently showing inferior quality coal as that of superior quality, officials said.
NTPC, MMTC and Arvarli Power Company Ltd, a joint venture company of NTPC Haryana and Delhi governments operate coal-based thermal power plants for which they import coal through global tenders.
CEPL was a successful bidder for supply of coal to NTPC and APCL after which it entered into agreements with its sister concerns in Dubai.
When MMTC was a successful bidder, it entered into tripartite agreements with CEPL and its sister concerns in Dubai.
The Dubai-based companies entered into agreements with Indonesian exporters for inferior quality coal, officials said.
The coal procured by Dubai-based intermediaries was supplied to CEPL or to MMTC through CEPL on the basis of inflated invoiced and manipulated test reports like the certificate of sampling and analysis as coal of higher grade, they said.
Once imported, these consignments were provided to NTPC and APCPL as coal of higher grade with higher prices, they said.
In order to conceal the original grade of the coal, the importing companies allegedly did not avail duty concessions offered by the government of India for coal imports originating from Indonesia, they further said.
To avail such duty concessions, the importers would have to submit factual documents from Indonesian exporters which would have exposed the actual value of the imports, it is alleged.
The officials of NTPC did not press for fulfilling duty exemption requirements which they did not do and accepted the consignments of coal, they said.
"The fraudulent modus operand adopted by CEPL had resulted in the supply of coal of inferior quality to the said power generation companies, as coal of higher grade with the active criminal participation of public servants concerned of NTPC, APCPL and MMTC by way of misuse of their official position," the FIR said.
It is alleged that MMTC and CEPL imported 90 and 57 consignments respectively between 2011-12 and 2014-15 for supplying to NTPC which received 143 of them and APCPL which received four.
MMTC and CEPL provided inflated values for these imports.
According to DRI probe, over-invoicing of Rs 363 crore was done by the MMTC while Rs 124 crore was done by CEPL.
"Thus a total excess amount of more than Rs 487 crore was paid by NTPC and APCPL to CEPL/MMTC in the import of coal..." it alleged.