Updated October 18, 2012 06:32:35
An Indian mining and infrastructure giant investing billions in Australia is fighting allegations of corruption at home.
While last week’s conditional sale of Cubbie Station sparked heated debate over Chinese investment in Australia’s natural resources, there has been much less scrutiny of the investment dollars pouring in from India.
Adani Enterprises has invested billions in coal deposits in Australia and is also a principal sponsor in OzFest, a cultural festival opened this week by Prime Minister Julia Gillard in New Delhi.
Adani is one of India’s largest and fastest growing mining and infrastructure conglomerates; its rise has been spectacular and controversial.
One of Adani’s most profitable assets is the Mundra Port and special economic zone in north-western India.
The port project has been plagued by legal challenges, and earlier this year India’s high court halted construction at a number of sites, finding Adani had failed to obtain environmental clearances and development was illegal.
Investigators have also raised concerns about some of the company’s dealings with politicians and officials.
Anti-corruption campaigner, former supreme court justice Santosh Hegde last year, as his final act as Karnataka state ombudsman, released a report into the theft of iron ore by numerous companies which cost the state $3 billion in royalties.
Justice Hedge’s report found Adani Enterprises acted corruptly in the illicit transportation of iron ore in excess of the permitted quantity.
“Adani used to come and pick up iron ore from various ports and during one of the investigations by my team they found out that nearly five lakhs (500,000 metric tonnes) of iron ore was illegally transported and kept in the port there,” he said.
“When we looked into it – certain emails sent from Adani’s local office – we found that certain payments were made at a given point in time by the office in Karva to certain officials and others.”
Justice Hegde’s report says officials of port departments, customs, police, mines, local politicians and others all received bribe money from Adani Enterprises.
The conglomerate’s founder, Gautam Adani, declined 7.30′s requests for an interview, but the company’s Australian chief executive, Harsh Mishra, says Adani Enterprises has always acted in accordance with the law.
“[Adani Enterprises] never had an opportunity, did not pay bribes, no rationale or reason to pay bribes,” he said.
“What is the commercial logic of such an order?”
Justice Hegde says it is more profitable to break the law than to follow the law.
“Those that follow the law find it very difficult to compete with those in the same trade,” he said.
Adani Enterprises plans to transplant the model it uses in India and build integrated mines, railways and ports in Queensland’s Galilee Basin to feed its Indian power stations.
If the projects gain environmental clearance, the scheme will become one of the world’s largest integrated coal supply systems.
Ms Gillard met Mr Adani as well as other business leaders during her New Delhi visit and says Australia has no issue working with Adani Enterprises.
“These are just allegations, we don’t deal in allegations,” she said.
The Government says investment on this scale will help double two-way trade to $40 billion over the next four years.Topics:
mining-industry, business-economics-and-finance, corruption, law-crime-and-justice, government-and-politics, qld, australia, india First posted October 17, 2012 21:17:50