ED arrests Coastal Energy Pvt Ltd developer in money laundering case


The case concerns an overvaluation of coal prices, with UAPs paying a higher price for the purchase of coal

The case concerns an overvaluation of coal prices, with UAPs paying a higher price for the purchase of coal

The Law Enforcement (ED) Directorate has arrested Ahmed AR Buhari, promoter of Coastal Energy Private Limited, Chennai, under the Prevention of Money Laundering Act 2002 (PMLA), in a case of overvaluation of coal prices whereby public sector companies paid higher purchase prices for coal.

According to a press release, the ED has initiated a money laundering investigation based on an FIR registered by the Central Bureau of Investigation (CBI), New Delhi, against Ahmed Buhari and other unknown officials of the PSU under various sections of the Indian Penal Code, 1860 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act 1988. The case was also investigated by the Tax Intelligence Branch and a show cause notice was issued under the provisions of the Customs Act 1962.

ED’s investigation revealed that Ahmed Buhari controlled 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 UAPs were supplied with low calorific value coal instead of the higher specification for which tenders were issued and executed by CEPL or MMTC and the coal was supplied by CEPL either directly or through the intermediary of the MMTC. The overvaluation of the lower quality of the coal was ultimately made on the basis of a fraudulent Certificate of Sampling and Analysis (COSA), while the original COSA describing the true quality of the coal was removed.

The investigation further revealed that Buhari generated proceeds of crime (POC) to the tune of ₹564.48 crore from the overvaluation of coal. Buhari diverted the POC to the tune of ₹557.25 crore via group entities CEPL and CNO, UAE and returned the same to India via Precious Energy Holdings Ltd, BVI and Mutiara Energy Holdings Ltd, Mauritius to invest in Coastal Energen, India. The POC amounting to ₹557.25 crore in possession of Coastal Energen has already been tentatively set by ED in 2020. Further investigation is ongoing, the statement added.

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