October 6th, 2017
“I think if I was the Australian Government, and I was considering giving a $1 billion loan to enable a rail project, I would be very concerned by what appears to be a corporate structure that is designed to maximise profits in tax havens and has as a sole director of the intermediate companies, somebody who has been under investigation for very serious financial offences in India.” – Adam Walters, research director at the consultancy Energy and Resource Insights, to Four Corners.
An investigation by the ABC’s Four Corners has said that it has uncovered tax haven ties for the Adani Group’s Australian operations, with key assets ultimately owned in the British Virgin Islands.
The entire ABC documentary can be watched here:
Four Corners is an Australian investigative journalism/current affairs documentary television programme on ABC, or the Australian Broadcasting Corporation.
The entire report can be read here: Adani Australia: Investigation uncovers tax haven ties to British Virgin Islands
The Adani Group, led by Gautam Adani, was hitherto an unknown name in Australia. In recent months, however, the Group has been at the centre of a heated debate over its expansion in Australia that centres around the Carmichael coal mine.
This mining and energy project (and a rail project), which are slated to open in Queensland, Australia and the Adani Group says will provide “a growth engine for the Queensland economy”, has sparked outcry from various environmental groups concerned about the health of the Great Barrier Reef.
The controversy over the Carmichael coal mine receives little attention in India, but is a major topic of discussion in Australia. And opposition to the project is not only based on environmental concerns but also over concerns over corruption and flouting of tax rules.
“Web of companies” enables Adani Group to escape tax obligations
The recent report by ABC’s Four Corners claims that “an opaque web of companies and trusts” has been put in place by Adani Group to minimise the tax that it pays.
Atulya Resources, a Cayman Islands domiciled company controlled by the Adani family, was previous deemed to be the the ultimate holding company for the Adani Group’s projects in Australia.
Four Corners, however, alleges that the Adani Group utilises another company in the British Virgin Islands, a tax haven in the Caribbean, to minimise tax costs. The investigation was based on filings in Singapore by privately-owned Adani companies owned by Vinod Adani, Gautam Adani’s brother.
According to the report of the investigation:
“[This company] is variously described in the offshore company filings as ARFT Holding Limited, AFRT Holding Limited and Atulya Resources Family Trust.
Adani Group’s filings with Australia’s corporate watchdog, ASIC, fail to mention this company, instead continuing to list Atulya Resources as the owner.”
Investigating officers from Directorate of Revenue Intelligence in India have previously accused Vinod Adani, along with ex-Adani Group employees and Adani companies, of executing a “planned conspiracy of siphoning off foreign exchange abroad … and Trade Based Money Laundering”.
But the case was recently quashed by an adjudicator, who said Vinod Adani’s companies were at “arm’s’ length” from Gautam Adani’s companies, and on legitimate commercial terms.
Additionally, the Adani Group told authorities that Vinod Adani, who is a non-residential Indian, is an independent businessman with “no involvement” with the Adani Group.
— 4corners (@4corners) October 2, 2017
Previously, Four Corners had done an elaborate feature, “Digging into Adani”, on Gautam Adani’s controversies, which included allegations of environmental destruction, money laundering and bribery. Adani Group responded to this feature, arguing against the claims made, including the “really trite charge of money laundering”.
Response from the Adani group on ABC Four Corners story Dear Mr Long,The team from ABC Television while visiting…
Not the first allegations against the Adani Group
This is not the first time that the Adani Group has faced allegations of fraud.
The Adani Group had previously been accused by the Indian customs intelligence of embezzling a huge sum of around Rs 1500 crore to offshore accounts by submitting inflated bills to an electricity project.
The Directorate of Revenue Intelligence (DRI) has alleged that the Adani Group had ordered equipment worth several hundred millions for a power project in Maharashtra using a shell company in Dubai and that the company had sold the same equipment back to a subsidiary of Adani Group at highly inflated prices. This was reported by The Guardian on August 15.
Six Adani subsidiaries were listed among 40 other companies being investigated for allegedly running a similar price-inflation scheme last year. The companies had been accused of inflating the price of coal imports from Indonesia to hide profits in overseas tax havens.
The academic journal Economic and Political Weekly (EPW) had been served a defamation notice by the Adani Group recently. The notice was served over a story EPW ran on how the government altered rules for special economic zones (SEZs), which led to the Adani Group reaping a profit of Rs 500 crore. (The editor of EPW was forced to step down following the publication of this report.)
The Logical Indian community urges the concerned authorities to look into the matter, ensure an unbiased investigation and punish those guilty accordingly.