New Delhi:  Nearly a decade ago, the country’s anti-smuggling authority initiated a probe capable of sending shockwaves across the country.

The Directorate of Revenue Intelligence (DRI), under the Union Ministry of Finance,  detected the possibility of a massive fraud in coal imports involving forty coal importers, including Adani Group, Anil Dhirubhai Ambani’s Reliance Group, Essar, Jindals and others.

Billionaires and other influential businesses, some of whom are perceived to be close to the  Bharatiya Janata Party, had allegedly inflated the cost of  importing Indonesian coal for Indian power plants and made a killing. The Indian consumer had paid for it with high electricity bills, it was alleged. 

Between 2015 and 2016, at least six  questions were raised in Parliament on it, addressed to Ministries of Finance, Power, and Coal, about the alleged overvaluation of coal imports. To each of the questions, the ministries broadly had the same answer: The matter is being investigated by the Directorate of Revenue Intelligence.

Any time a minister tells either house of Parliament that she or he will do something, the statement is considered an assurance. All such assurances given by the government have to be implemented within three months and are followed up by an assurance committee, an accountability watchdog that oversees promises made in the Houses.

So, the statements by these ministries, beginning April 2015, that the Adani Group and others were being investigated was recorded as an assurance. The government was now committed to complete the investigation and inform the Parliamentarians on how the investigation was progressing as well as its findings. 

For the next six years, the assurance committees of both houses of Parliament followed up with the government – repeatedly asking it to disclose more on the investigations – only to keep hitting a dead end. 

This was not the only time the Narendra Modi-led BJP government tried to escape its commitment to investigate alleged scams by Adani Group. Our analysis shows, over the last nine years, the Narendra Modi government, in response to queries by lawmakers, assured Parliament at least seven times that it was investigating alleged scams by the Adani group and other corporations. Several ministries of the government committed that they would share the status and result of the investigations. 

But when public attention faded, media shifted focus, and assurances did their job of placating the opposition’s fury in debates, the Union government quietly worked to backtrack on its promises to conduct investigations and report the findings to the citizens through Parliament, The Reporters’ Collective has found. 

Adani told The Reporters’ Collective:

‍“As a responsible corporate, for valuation and clearing of cargo, we have been adhering to all standard rules and regulations stipulated by the Indian Customs authorities.”

After submissions of documents and details five years ago, the DRI had not demanded any further information from it, the company added. 

The Collective has not received any response from the Union government.

It is quite natural for corporates to plead innocence. But, those elected to run the government are expected to be answerable to citizens through Parliament. 

Though Parliament has an elaborate process to hold the government accountable for the promises made in the two Houses, the government has worked assiduously over the past five years to escape accountability, shows this investigative series. 

In this first part of the investigative series, we reveal how the government failed to come through on its repeated assurances to Parliament on investigating alleged graft involving a top business conglomerate. 

^Assurances

One of the cardinal rules of Parliament is: Don’t bluff or lie.

Teams of Lok Sabha and Rajya Sabha officials meticulously review every word of ministers’ speeches, comments, statements and answers given in the two houses of Parliament. 

When a minister tells Parliament they will do something specific, the statement is considered an assurance. A predetermined list of phrases, such as “I shall look into it” or “data is being collected,” helps determine whether a statement qualifies as an assurance. All such assurances by the government have to be implemented within three months.

For example, if a minister is asked a question and responds that they don’t have the answer but will provide later, this statement is considered an assurance. If the minister commits the government to any specific action, like it will bring in a law, carry out an investigation or form a committee, then they are treated as assurances by the government to the public through Parliament.

When assurances show signs of unravelling, the assurance committee, one for each House, comprising parliamentarians handpicked by the chair, pushes ministry officials for status updates of the progress made on the assurances, along with evidence.

The purpose of these committees is to hold the government accountable for the claims and promises it makes to Parliament. 

But there is a loophole that renders the assurance committees toothless. There is no provision for penalising ministers who have bluffed their way out of their assurances to Parliament. Worse, the reports of the assurance committees are not discussed even in Parliament. So, ministers, over the decades, make promises and claims, only to backtrack later on their statements, go scot-free.

How to ^kill an assurance 

In this case of alleged corruption by Adani Group, the BJP government backtracked on its promise to report to Parliament about the status of the investigations. It instead asked Parliament to forget all about it.

In October 2016, the Ministry of Finance first asked the Lok Sabha committee to drop the assurance.

The reasons given were: “limitations of the investigating agencies in overseas investigation” and the probe would be a “time-consuming process”.

The committee, while agreeing that the probe would take time, refused to drop the assurance. “The nature of irregularities warrants a thorough probe and fixation of responsibility for taking appropriate action,” said the committee.

What the Union Ministry of Finance did not disclose was the fact that DRI was forced to approach foreign countries because at least two Indian public sector banks refused to cooperate with the investigation. The State Bank of India turned down DRI’s requests for information citing confidentiality of client information, it has been reported. Although public sector banks are autonomous bodies, the Ministry of Finance through its Department of Financial Services has a fair amount of authority and control over its functioning.

The ministry also didn’t divulge details of how DRI officials who initiated the investigation were changed midway, allegedly derailing the probe. This was brought out by the media.

In December 2017, Arundhati Bhattacharya, the former head of the State Bank of India who had refused to cooperate with the DRI probe, was appointed to a high-powered expert committee to frame the rules for coal auctions in the country. The committee’s recommendations eventually ushered in the commercial coal auction regime currently in place. Earlier investigations by The Reporters’ Collective have shown how the Union government went on to gift coal blocks at incredulously low prices to private firms under this regime. 

In October 2017, the Lok Sabha committee turned to the Union Ministry of Coal. The ministry had assured Parliament in May 2015 that it would collect information on DRI’s investigation into coal imports and table the data. 

This time around, in a classic case of passing the buck, the Union Ministry of Coal said, “The Ministry of Coal has no role in the case as the Directorate of Revenue Intelligence is investigating the matter.” It added that investigations against the majority of importers named were ongoing while probe against four were closed. 

Lok Sabha’s assurance committee noted in its report that it would meet DRI officials. But details of these meetings are not available in the committee’s subsequent reports.

The corruption case against Adani Group popped up again in Parliament in 2016. The then Minister of Power was asked about the status of the investigation into overvaluation of coal imports and the number of people arrested. Its answer was as vague as that of other branches of the government: DRI is looking into the matter. This was turned into an assurance. The government would again be required to share the status and findings of the investigation. 

But, it did not. Instead it also asked that Parliament stop questioning it on the matter and drop the assurance.  

In March 2018, the Rajya Sabha committee rejected the Union Power Ministry’s request to drop this assurance on providing details of the investigation. But the BJP government remained adamant and did not provide any details. 

A report by the Rajya Sabha Committee on Assurances in 2021 records that the question about the Adani probe was raised again before the government. It told the Union Ministry of Power that “the assurance is of grave concern and investigations in such cases should be completed soon, so that the culprits may be brought to justice”. 

We cannot ascertain why, but the Assurance Committee too did a U-turn and the assurance was later dropped.

In February 2020, the Lok Sabha committee pulled up the Ministry of Finance for not coming through on its assurances to Parliament. The committee flagged “inordinate delays” and a ministerial process that was “far from effective.”

It asked the ministry to follow up on the probe into artificially overpriced coal imports. It asked the Ministry to “step up its efforts, adopt a proactive approach and explore all possible channels including diplomatic and other globally accepted channels”.

Yet, a year later, the Ministry of Finance was back with its request to get the assurance dropped. It told the Parliamentary committee the probe was unlikely to be completed anytime soon. 

It said, “The Assurance is pending since 2016 and is unlikely to be fulfilled anytime soon.”

This request, too, was rejected, with the committee once again asking the ministry to “vigorously pursue the matter”.

The delays, sometimes extensive, are a way of denial because answers can be politically damaging. The Union government was keen to get Parliament off its back on these investigations into crony capitalism and corruption. 

Unrelenting, in December 2022, the Ministry of Finance knocked the committee’s doors again to drop it, arguing that “availability of documentary evidences (sic) for conclusion of investigations is not within the control of the DRI”. 

This time the ministry was successful. The assurance was dropped.

While DRI probe languishes for a decade and the government’s parliamentary assurances hit a dead end, investigative journalists from Financial Times and OCCRP have managed to recently present evidence suggesting Adani Group had over-invoiced imported coal. The Adani group continues to say it has done no wrong. The government continues to hoodwink Parliament on it.

The Other Adani Probe 

Two years before Hindenburg Research accused Adani Group of pulling the “largest con in corporate history” and stock manipulation, Trinamool Congress’ Parliamentarian Mahua Moitra asked the Ministry of Finance on 19 July 2021 a question.

Who really owns Adani Group’s foreign investors? Mahua Moitra also wanted to know if any foreign portfolio investor or Adani Group entities were being probed for “suspicious transactions”.  

The then Minister of State for Finance in his response said market regulator SEBI is probing “some Adani Group companies” over “compliance with SEBI regulations”. 

Neither did the response specify any details of the probe despite Moitra asking for them nor did it tell what SEBI regulations are the group firms suspected of breaking.

He added that “DRI is investigating certain entities belonging to the Adani Group of companies under laws administered by it.” Publicly available information made it clear that the probe was into over-invoicing of imports.

This response that an investigation is on was considered an assurance. 

The government would continue to keep Parliament in the dark on both the probes into Adani group’s alleged illegal practices. And, continue to try and get the process for Parliamentary scrutiny of the investigations dropped. 

Why? The investigations are too time consuming, it would reiterate. 

In the only available record of deliberations on this assurance, the Ministry of Finance argued on 13 January 2023 that the assurance be dropped since both investigations involve foreign entities. 

Ten days later, Hindenburg Research, put out a report that stirred the pot.  

The report alleged that Adani Group was manipulating stocks through its foreign portfolio investors, costing the conglomerate a whopping USD 153 billion market rout.

The report stirred a noisy public debate and demand for probes. But, the Union government was in no mood to let the question of these probes linger in Parliament. In May 2023, the Lok Sabha Assurance Committee dropped the assurance, nearly two years after Parliamentarian Mahua Moitra had raised the questions. Months later she was expelled from the Lok Sabha after being accused of taking bribes from Adani’s rival businessman for asking the questions. SEBI, it turns out, has sent notice to Hindenburg Research questioning its actions.

The Adani Group spokesperson told The Collective:

“As a public limited company, we have also complied with the standard accounting practices and Transfer Pricing Policy of the Income Tax authorities.”

At present, the probe into Adani group’s alleged corruption is off Parliament’s table. The elaborate process of Parliament’s assurance committees has come to naught.

OTHER ^BROKEN PROMISES

This is the first part of the Parliament Defied Investigative Series. Tomorrow, how ‘national interest’ is sacrificed.