Huge Overvaluation in import of Coal?
TIMES of India reports today that DRI has unearthed a scam involving companies inflating the value of coal imports from Indonesia for their power plants thus siphoning money abroad. Initial estimates by the agency pegged the overvaluation at Rs 29,000 crore in the period 2011-2014.The modus operandi adopted by the companies is that while coal imports would directly be shipped from Indonesia, the invoices will be routed through an intermediary based either in Hong Kong, Singapore or Dubai. The inflated amount will be sent to the intermediary who, in turn, would remit the actual value to the Indonesian supplier. The overvalued component would be diverted to tax havens. The intermediary is either related to the importer or handles such operations on commission basis.