CBI books Adani Enterprises, NCCF ex-officials in coal supply contract case

The matter dates back to 2010, when Andhra Pradesh Power Generation Corporation had floated a tender for the supply of 600,000 metric tonnes of coal

The Central Bureau of Investigation (CBI) on Wednesday registered a first information report against Gautam Adani-led Adani Enterprises, two former executives of National Cooperative Consumers’ Federation of India (NCCF), and others, for criminal conspiracy and corruption in awarding the contract for supply of imported coal to an Andhra Pradesh-based power company.

The matter dates back to 2010, when Andhra Pradesh Power Generation Corporation (APGENCO) had floated a tender for the supply of 600,000 metric tonnes of coal on free-on-rail destination basis to Dr Narla Tata Rao Thermal Power Station, Vijayawada, and Rayalseema Therma Power Plant, Kadapa, from any port.

Following the tender notice, NCCF called for bids. That July, NCCF received bids from six entities — Adani Enterprises, Vyom Trade Links, Maheshwari Brothers, Coal Swarana Projects, Gupta Coal India and Kyori Oremen.

Only three bidders quoted the NCCF margins, which were rejected by the NCCF’s Delhi head office, as they were not found to have fulfilled tender conditions. The other three, including Adani, had not quoted any margin.  

Instead of cancelling Adani Enterprises’ bid, the NCCF management informed it about the offer margin of NCCF through its representative Munish Sehgal. According to the CBI report, Sehgal was present at the NCCF office at the time. Adani, subsequently, informed the branch manager of NCCF that it agreed to pay minimum service charge of 2.25 per cent to NCCF.

Adani Group Spokesperson said, "Adani Enterprises has complied with  the process, all formalities and relevant laws for the subject supply of coal. The Company has not done anything wrong in 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 CBI enquiry revealed that negotiations were held by senior officials of NCCF after the tender process to give “undue favour” to Adani Enterprises. CBI added that Adani had not qualified when the tender was opened at NCCF's Hyderabad Branch.

Virender Singh, then chairman of NCCF, New Delhi, and GP Gupta, the then NCCF managing director, had favoured Adani Enterprises, the CBI alleged in the report.

“It is prima facie evident that when the bids were being processed at NCCF head office, the representative of Adani Enterprises was informed about the rejection of those bidders who had not submitted the NCCF margin quote and also that Maheswari Brothers had quoted 2.25 per cent margin,” CBI said in the report. 

The committee overruled the two conditions laid down in the notice and instead of disqualifying Adani Enterprises, made undue favours, CBI said. It added in the report that the decision to award the work to Maheswari and Adani was taken by NCCF’s top management.

Additionally, the CBI report also highlighted links between Adani Enterprises and Vyom (another bidder).

According to the central agency, Adani Enterprises gave an unsecured loan of Rs 16.81 crore to Vyom Trade in 2008-09. The guarantee of both companies were issued by the same bank (State Bank of India), and at the same time.

Therefore, it was prima facie apparent that Adani presented Vyom as a proxy company in this particular tender and Vyom withdrew its offer on very flimsy grounds, CBI said in the report. In a letter to NCCF, Vyom wrote that since working hours were over and the time available was too short, it would be difficult to offer its price for onward submission.