Ahmedabad/Panaji, Feb. 27: Adani Enterprises managing director Rajesh Adani was arrested by the CBI on Saturday morning in connection with alleged customs duty evasion, a move that sent shockwaves through India’s business community. The Gujarat high
court gave Mr Adani interim bail late Saturday evening following a habeas corpus petition by a member of his family, Mr Vasant Adani.
“We arrested Rajesh Adani for undervaluing imported naphtha and furnace oil,” Central Bureau of Investigation spokesman Harsh Bahl said, adding that the evasion amounted to over Rs 8 million.
Mr Adani is the younger brother of Mr Gautam Adani, the 10th richest Indian according to Forbes. Mr Gautam Adani is the chairman of Adani Enterprises and sister concerns which form one of India’s fastest growing business conglomerates with interests in ports, power, infrastructure and energy besides commodity trading.
A CBI team from Goa arrested Rajesh Adani from his plush residence in Ahmedabad at around 7.30 am. CBI joint director (Western region) Rishi Raj Singh confirmed the arrest. Subsequently, Mr Rajesh Adani was taken to the civil hospital for a mandatory checkup. He complained of restlessness and was later admitted to hospital for hypertension. Doctors said he was recovering fast and would be released before Saturday night. However, before the CBI could produce him before a local magistrate for transit remand and take him to Goa, the Adanis got interim bail from the Gujarat high court.
“Adani had in the year 2006-07 imported naphtha, a petroleum product, and did not pay customs duty in Goa,” CBI joint director Rishiraj Singh claimed. A case was registered in January 2008 by the Goa Anti-Corruption Bureau of the CBI. Sources said nine customs officials from Goa are also on the CBI’s radar for alleged involvement in this case.
The CBI is also checking whether any other employees of the diversified group are involved.
Meanwhile, the Adani Group was shocked by the development. In a press communiqué issued they claimed Adani Enterprises Ltd’s petroleum products division had made arrangements, in the normal course of business, to import certain petroleum products in 2005-06 and 2006-07 on behalf of licence permission holders. “These licence permission holders were responsible for fulfilling all formalities and payment of duties,” the communiqué said, adding that to date no show-cause notices or cases have been registered by the customs department against the company or Mr Rajesh Adani in respect of these transactions.
The group said it was shocked to know of the CBI development because “CBI has issued an arrest memo for Mr Rajesh Adani without providing any reasons or details”. Stressing that Mr Rajesh Adani was not responsible for any day-to-day business operations, the company said it was pursuing the matter with the assistance of its legal counsel.
The CBI FIR has named 10 customs officials and two firms, one the Mumbai-based Ganesh Benzoplast and the other the Goa-based clearing house JAF Leitao and Son, Goa, as allegedly involved in the customs duty evasion scam. As per the FIR, these 10 officials entered into a conspiracy with Ahmedabad-based Adani Enterprise which allegedly undervalued the import of two consignments of naphtha and one consignment of furnace oil, causing the customs department a loss of Rs 1.07 crore. Ganesh Benzoplast has been charged with providing warehousing facilities to store these consignments, to which it was not entitled, at the port town of Vasco da Gama. The CBI has booked Mr Adani, Ganesh Benzoplast and JAF Leitao and Son under IPC Sections 120 (b) for criminal conspiracy and 420 for cheating. Ten customs officials have been booked for abuse of their official position.
Meanwhile, the Adanis’ legal counsel argued in the Gujarat hIgh court that Mr Rajesh Adani’s arrest was a case of illegal detention and contradicted Supreme Court guidelines. Having heard the submission, Justice Rekha Doshit granted interim bail to Mr Adani and scheduled the matter for March 2.
Earlier on Saturday, CBI officials in Goa were co-ordinating arrangements to bring Mr Adani to the state on Sunday. “We are bringing him to Goa tomorrow. More arrests are likely in the case,” CBI SP S.S. Gavali said.
“We found that they had sold the consignments to around 16 companies across India, including two companies in Goa,” said Mr Gavali. Investigations into the case began after a tipoff, he said. A case was first registered in April 2008 against all the parties under Sec. 120-B r/w Sec. 420 of the IPC and Sec. 13 (2) r/w Sec. 13(1)(d) of the PC Act, 1988.
The allegation is that 10 customs officials of the Goa customs “dishonestly and by abuse of their official position facilitated importation by undervaluing” the consignment, leading to a loss of Rs 80 lakhs in excise dues to the government exchequer. A further Rs 20.7 lakhs in warehousing charges was lost to the government since the warehouse licence had expired during the time of storage, Mr Gavali said. Two of the customs officials named in the case have since retired, he added.
Deepal Trivedi and Pamela D’Mello