The Enforcement Directorate (ED) has arrested Ahmed A.R. Buhari, promoter of Chennai-based Coastal Energy Private Limited (CEPL), in a money-laundering case involving overvaluation of coal imported for supply to public sector undertakings (PSUs).
The ED probe is based on a First Information Report registered by the Central Bureau of Investigation (CBI) against Mr. Buhari and others, who included unknown officials of the National Thermal Power Corporation (NTPC), the Metals and Minerals Trading Corporation (MMTC) and Aravali Power Company Private Limited (APCPL).
Earlier, the Directorate of Revenue Intelligence had also conducted a probe and issued a show cause notice to CEPL under the Customs Act.
According to the ED, Mr. Buhari controlled CEPL, Coastal Energen Private Limited, Coal & Oil Group (Dubai) and other offshore entities located in Mauritius and the British Virgin Islands (BVI).
The public sector undertakings were supplied coal of lower calorific value, instead of the higher specification for which tenders were floated and executed by the CEPL or MMTC. The coal was supplied by CEPL either directly or through MMTC.
The overvaluation of the low quality coal was done on the basis of fraudulent Certificate of Sampling and Analysis (COSA), whereas the original COSA depicting the genuine quality of coal was suppressed.
Based on inflated invoices and manipulated test reports, 147 consignments of coal were supplied, according to the CBI case.
The ED alleged that Mr. Buhari generated ₹564.48 crore from the overvaluation of coal. He diverted ₹557.25 crore through CEPL and CNO Group entities, the United Arab Emirates, and routed the same back to India via Precious Energy Holdings (BVI) and Mutiara Energy Holdings (Mauritius) to invest in Coastal Energen, India.
The agency had already attached assets worth ₹557.25 crore that was in the possession of Coastal Energen.
