Adani Enterprises face CBI probe in six lakh tonne coal deal

CBI has registered a case against Adani Enterprises accusing it of procuring a deal in 2010 to supply six lakh tonnes of imported coal to Andhra Pradesh Power Generation Corporation (APGENCO) despite being ineligible and using a proxy company to garner the contract.

Three former top officials of National Cooperative Consumer Federations -- then Chairman Virender Singh, then Managing Director G P Gupta and then Senior Advisor S C Singhal -- were also named in the FIR registered on Wednesday for giving "undue favour" to Adani Enterprises in awarding the tender despite its disqualification on account of not submitting the margin.

The FIR said the representative of Adani Enterprises was informed about the "imminent rejection" of their tender on the ground that it had not submitted the margin when the tenders were opened and later awarded the contract along with another eligible bidder Maheshwari Brothers Coal Ltd (MBCL) after securing a letter that they agree to pay minimum service margin at 2.25% as quoted by the MBCL.

It came to light during investigations revealed that post tender negotiation was done by senior officials of NCCF to "give undue favour" to Adani Enterprises.

In a statement, an Adani spokesperson said the "subject matter is an old one" and Adani Enterprises Ltd has "complied with the process, all formalities and relevant laws" regarding the deal. "The company has not done anything wrong in the supply of coal. It's a preliminary investigation report only. The Company shall respond to the same and shall also put forth the factual position to the authority," the spokesperson said.

"Instead of cancelling the bid", the CBI claimed, senior NCCL management conveyed its "offer margin" to the company through its representative Munish Sehgal who was present at NCCF headquarters in Delhi and "subsequently, Adani Enterprises...informed that they agree to pay minimum service price margin/charges at 2.25% to NCCF."

It also came to light that one of the companies in the bidding was Vyom Trade Links, which had got an unsecured loan of Rs 16.81 crore from Adani Enterprises in 2008-09 and that the bank guarantees of the two companies were drawn from the “same bank and at the same time”. The CBI alleged, “it is prima facie apparent that Adani Enterprises Ltd presented Vyom Trade Links as a proxy company in this particular tender and it withdrew its offer on flimsy grounds.”

According to the FIR, NCCL, after receiving limited tender notice from APGENCO on 1 July 2010, first selected MBCL Ltd without floating an open tender to supply coal for a margin at 2.25%. However, seven days later, APGENCO informed that it had extended its tender deadline from July 7 to July 12 following which NCCL cancelled the tender awarded to MBCL.

The NCCL, which did not go for an open tender initially, then decided to go for an open tender. The FIR said before the extension of date, the NCCL had seven days to complete the process but after extension, it had only five days but the "management felt that they have sufficient time to call open tender".

Flouting rules by not constituting Head Office Committee or securing concurrence of Finance Division on draft tender file, the CBI alleged that Singh, Gupta and Singhal then decided that the tenders will be opened on 10 July, 2010. The NCCL received six bids from Adani Enterprises, MBCL, Vyom Trade Links Ltd, Swarna Projects Pvt Ltd, Gupta Coal India Pvt Ltd and Kyori Oremin Ltd.

When the tender documents were opened, representatives of all firms except that of Vyom were present. During preliminary enquiry by CBI, it was found that Gupta Coal India quoted a margin of 11.3% and MBCL 2.25% while others, including Adani Enterprises did not quote the margin to be paid to NCCL.

However, the bids of Swarna Projects Pvt Ltd, Gupta Coal India Pvt Ltd and Kyori Oremin Ltd were rejected as they were "not found to be fulfilling the tender conditions". The tender was then awarded to MBCL and Adani Enterprises after Vyom Trade Links withdrew from the race, saying time available to it is too short to come up with their offer of margin.