Adani,Corruption and Vizhinjam Port

The majority who makes self-righteous statements against corruption and who voted against this pet social evil is living under the belief that the last one year has been corruption-free. Burning of that secular fabric is but a small price to pay for this achievement, they say. The fact that one Mr.Adani, who accompanies the dictator in all foreign trips, has increased his assets by 48 percent in this one year, is but a small detail.

Down here in Kerala, even people who earlier had a problem with Adani, are now clamouring for the State Government to award the contract for running the Vizhinjam Port to Adani. In an earlier post ( , I had pointed out how the terms of the contract are loaded unfairly against the state. Here, let’s us rewind a bit and a read a story of corruption by one of his other companies — Adani enterprises (yes, owned by the dearest friend of the incorruptible dictator) at the Belekeri Port in Karnataka.

The rest of the paragraphs are all quoted extensively from the 464-page report filed by Lok Ayuktha Santosh Hegde. The most important recommendation of the Lok Ayuktha was this — “Based on the figures compiled from the Customs and Department of Mines and Geology, it is computed that 2,98,60,647 Metric Tons (around 2.98 Crore MT) of Illicit iron ore was exported during the period 2006–07 to 2010. estimated value of 2,98,60,647 Metric Tons of illicit iron ore exported during the period 2006–07 to 2010 is Rs 1,22,28,14,22,854/-……….The Adani Enterprises has paid the bribes for getting undue favour for illegal exports. Action should be initiated against the company to cancel the lease granted at Belekeri port. The company should be black-listed and barred from participating in any future contract, grant or lease, etc by the Government.”

Some other relevant parts-

“Belekeri is a fair weather port. In this port, the Government has leased out certain areas within its limits to private companies, who are port service providers in this port. One of these companies is Adani Enterprises Limited (AEL).

On 20th February 2010, on a complaint by one Sri Desai and also on the reliable information, the Lokayukta police conducted a raid at Belekeri port and seized certain documents and computers, etc. A forest offence case was registered in FIR 17/2009–10 dated 15/3/2010 by forest department against the Port Conservator of Belekeri port. On 20/3/2010, iron stored in the port area was seized and the Forest Department handed over the iron ore seized to the Port Conservator, Belekeri for safe custody. In
June 2010, it was found that large portion of the seized iron ore was stolen from the port. Subsequently, cases of theft and other offences have been registered against the Port Conservator and companies/firms and others by the jurisdictional police.

During the raid on 20/2/2010, the Lokayukta Police have seized computer and other documents, including forged permits, from the office of the Adani Enterprises and SMSPL. From the seized electronic records, lot of materials, including the mode of illegality in export of iron ore by the said company was noticed. Investigating team, sought details of Adani Enterprises and Mallikarjun Shipping Private Limited (SMSPL) from the period 20/2/2010 till the date of furnishing the information. From the information gathered, it was seen that 2.30 crores of Metric Tonnes (MTs) of iron ore was exported from Belekeri port between 2006–07 and April-May 2010. As against this, the total permits issued for transport of iron ore to Belekeri port during the same period was for 1.26 crores MTs. Therefore, it is clear that 77.38 Lakhs MTs of illicit iron ore was exported from this port during the above said period. It is seen that M/s. Adani Enterprises and M/s. Sri Mallikarjun Shipping Private Limited, has on an average received 20.26 MTs of iron ore per lorry as against 16 MTs per truck load permitted. The data received also refers to 2,99,255 trips of loaded lorry carrying iron ore to Belekeri port between the period 2009 and May 2010. The data also indicates that over loading of trucks carrying iron ore is a routine practice leading to substantial iron ore theft.

Something significant that is noticed is that 44 companies/firms were supplying iron ore exclusively to Adani plot of Belekeri port, 30 companies/firms were supplying iron ore exclusively to Mallikarjun plot and 8 companies/firms were supplying iron ore to both at Adani and Mallikarjun plot. It is also to be seen that in most of the cases, the quantity supplied by the companies were much more than the quantity for which they had obtained permits for the corresponding period, indicating that illicit iron ore was being exported. There is also material to come to the conclusion that in many cases, permits have been issued later while the iron ore was supplied earlier. In such cases, permits of large quantities were issued during March and corresponding quantity of material was not supplied thereafter against those permits. This clearly indicates that such companies/firms had obtained permits to cover up the earlier transportation of illicit iron ore. It is also noticed that this cover up was done in response to the Lokayukta raid in February 2010 and subsequent actions.

The Lokayukta police conducted a raid on 20/2/2010, as stated above, and have seized the computer and other documents from M/s. Adani Enterprises and Sri Mallikarjun
Shipping Private Limited. The digital data were recovered from the Hard disks of the seized computers. A file was retrieved from the computer attached with an e-mail, named ‘cash a/c’. The file was sent from Accounts Section of Adani Enterprises,
Belekeri on Friday, 28th March 2008 by Praveen Bajpai of Adani Enterprises to Samuel David, Mittal and Manoj Jha for getting approval of unaccounted payments made on behalf of Adani Enterprises, Belekeri port. The details of such payments have been reproduced at Annexure-6 of Chapter-2, which indicates that money has been regularly paid to Port authorities, Customs authorities, Police Department, Mines and Geology and even to MLAs/MPs. Major regulators of export activities are Customs Report Department and Port Department. Before a ship sets sail, Customs have to give ‘Let Export’ permission and Port Authorities are the facilitator and controller of the activities of Port handlers/users. Regular payments were made by the port handler and stevedore to various regulating authorities and officials.”

Details of bribes paid

“The officials of Port department, Customs, Police, KSPCB, CRZ, Mines, Local politicians and others are involved in receiving the bribe money from M/s. Adani Enterprises.

In regard to Port Department, it is stated that the payments were made on Ship-wise basis and different rates were fixed for different level of officer. Further, the general mode of payment were, PD — Port Director, 50,000/- per ship sailed; PO-Port Officer, 25,000/- per ship sailed; DPC-Deputy Port Conservator, 5,000/- per shipment and Port staff 5,500/- per ship sailed. In regard to Customs Department, it is stated that the payments to Custom officials was done on the basis of number of shipments, as well as, quantity exported. The general mode of payment to Customs Department was, before 26/5/2006, 12,000/- per ship; between 26/5/2006 and 11/1/2008, 6,000/- per ship plus 0.50 per MT; and from 11/1/2008 and onwards, 0.50 per MT plus 1,00,000/- quarterly to AC-Custom. 16) In regard to Police, it is very interesting to note that Superintendent of Police receives 1,00,000/- bi-monthly; Addl. Superintendent of Police, receives 25,000/- monthly; Deputy Superintendent of Police receives 10,000/- monthly; Circle Inspector of Police receives 14,000/- monthly and Outpost receives 2,000/- monthly. Mines and Geology officials were paid in lump-sum amount at regular intervals. MLAs/MPs were paid once in a while in a lump-sum amount, particulars of which are at Annexure-6 of Chapter-2. The said report of Dr. U.V. Singh’s team also contains the payments made to CRZ, Weights and Measurement Department and other authorities. 17) The payment of bribe amounts to different departments has progressively increased from the year 2004–05 to 2007–08, which was 22,62,924 in the year 2004–05; 48,36,920/- in the year 2005–06; 66,31,144/- in the year 2006–07; 1,28,37,242/- in the year 2007–08. All these payments were not shown in the balance sheet of the company and were unaccounted and paid in cash.


The practice of loading minerals in the ships which carry them to other countries, at Belekeri port is that these ships which are berthed in deep sea are loaded with cargo by taking the cargo from the port through barges. The activities of the port are supposed to be controlled by the Port authorities under the Karnataka Ports (Landing and Shipping Fees) (Amendment) Rules, 2006 and other related enactments. The port is not equipped with Coast guards for monitoring of movement of vessels and others activities as found in ports like Mangalore. There is no watch tower and other infrastructure to keep control of illegal activities in the port. Dr. U.V. Singh’s team report cited above has observed that Belekeri port should not have been allowed to export iron ore, until security and other arrangements are upgraded.


Those who want more information can read the entire LokAyuktha report here -


As you can see, Adani enterprises was involved in corruption at every level in Belekeri Port. And, this is the company that the state is going to do business with, by agreeing to unfair terms. (To recap — The state Government is spending 5072 crores for this project while Adani is spending Rs.2453 crores. But for the first 15 years, the Government is not getting any revenue share. From the 15th year, the govt is getting 1 percent, with 1 percent increase every year.The same Adani is offering 37 percent revenue share right from the first year for the Ennore port in Tamil Nadu, the contract for which was signed last year. Also, the State Government has to repay the 800 crores of viability gap funding provided by the central government from the 15th year. And, Adani will be holding the ownership of the port for 60 years.)

The 31 percent last year famously asked “If not the mass murdering dictator, who?”. They will probably ask in this case — “If not this corrupt behemoth and his unfair contract, what?” And, that’s not a question worth even listening, leave alone answering.