ED Files Prosecution Complaint in Rs 564 Crore Money Laundering Case

The Directorate of Enforcement (ED) has filed a Prosecution Complaint in the Hon’ble Principal Session Judge’s Court in Chennai against Ahmed A. R. Buhari and six others in a money laundering case involving the overvaluation of coal prices, in which the Public Sector Undertakings paid a higher price for lower quality coal. On April 29, 2012, the Court took cognizance of the Prosecution complaint.

On the basis of a FIR filed by the Central Bureau of Investigation (CBI) in New Delhi against Ahmed A.R. Buhari, Promoter of M/s. Coastal Energy Pvt. Ltd, Chennai, and other unknown officials of PSUs under various sections of the Indian Penal Code (IPC), 1860, and Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988, the ED launched a money laundering investigation. The Directorate of Revenue Intelligence also undertook an inquiry into the situation, and a show cause notice was given to the party under the provisions of the Customs Act, 1962.

Ahmed Buhari is the owner of M/s Coastal Energy Private Limited, Chennai, Coastal Energen Private Limited, Coal & Oil Group Dubai, and other offshore businesses in Mauritius and the British Virgin Islands, according to the ED investigation.

The PSUs were supplied coal with a lower calorific value rather than the higher specification for which tenders were floated and executed by CEPL or MMTC, and the coal was supplied by CEPL either directly or through MMTC on the basis of an overvalued invoice for lower quality supported by a fraudulent Certificate of Sampling and Analysis (COSA), whereas the original COSA depicting the genuine quality of coal was suppressed.

Buhari generated Rs. 564.48 crore in proceeds of crime (POC) through the overvaluation of coal, according to the investigation. Ahmed Buhari had routed the POC through a number of firms before incorporating it towards the installation of a power plant by his other company, Coastal Energen.

Ahmed A R Buhari, M/s Coastal Energy Private Limited, Chennai, M/s Coastal Energen Private Limited, Chennai, M/s CNO DMCC, Dubai, M/s CNO LLC, Dubai, M/s Precious Energy Holdings Limited, British Virgin Islands, and M/s Mutiara Energy Holdings Limited, Mauritius have all been named in the prosecution complaint. Ahmed A. R. Buhari manages, controls, and owns beneficially all six accused companies.

The land, plant and machinery, and other assets of M/s. Coastal Energen Pvt. Ltd’s power plant, valued at Rs 564.48 crore, were previously provisionally attached and are now sought to be confiscated through this prosecution complaint.

Further investigation is in progress.