The Enforcement Branch has arrested the promoter of a Chennai-based company in a money laundering case related to an alleged overvaluation of coal when selling to public sector companies. The accused was identified as AR Buhari, promoter of Coastal Energy Private Limited (CEPL).
“Buhari controls companies like Coastal Energy Private Limited, Chennai, Coastal Energen Private Limited, Coal & Oil Group Dubai and other offshore entities located in Mauritius and the British Virgin Islands,” the ED said in a statement released on Friday. .
He said some PSUs were supplied “low calorific value coal instead of the higher specification for which tenders were issued and executed by CEPL or MMTC (Metals and Minerals Trading Corporation) and the coal was provided by CEPL either directly or through MMTC”.
The agency said the “overstatement” of the inferior quality of the coal was made using a “fraudulent” Certificate of Sampling and Analysis (COSA) and that the original COSA describing the genuine quality of the coal coal had been “removed”. Buhari, he alleged, generated “proceeds of crime” to the tune of Rs 564.48 crore from the overvaluation of coal.
“Buhari diverted the proceeds of crime to the tune of Rs 557.25 crore through group entities CEPL and CNO, UAE and funneled the same proceeds to India through Precious Energy Holdings Ltd, BVI and Mutiara Energy Holdings Ltd , Mauritius to invest in Coastal Energen Pvt. Ltd, India,” the ED alleged. Funds worth Rs 557.25 crore, in possession of Coastal Energen Pvt. Ltd, were provisionally seized by the agency in 2020.
The ED filed the money laundering case against the accused after learning of separate investigations by the CBI and the Directorate of Tax Intelligence.