An investigation carried on in the Scandinavian country of Netherlands which involved the arrest of three employees of a local Dutch firm last week has led right to the doorstep of Reliance Industries Chairman and Asia’s richest man Mukesh Ambani.
The former employees of the Dutch pipeline firm A Hak, who were arrested, were accused of over invoicing services and works rendered to East West Pipeline previously known as Reliance Gas Transportation Pipeline to the tune of $ 1.2 Billion (roughly ₹ 8,400 crore) between 2006 and 2008.
Let us recall that the East West Pipeline which transports natural gas from the KG Basin in Kakinada, on the East Coast to Baruch in Gujarat, on the West Coast was sold last month by Reliance Industries to Canadian Firm Brookfield Asset Management for ₹ 13,000 crore.
The accusation made was that the Dutch firm would over invoice the value of materials and services provided to Reliance, who would pass on the excess cost of production to the final customers, and the proceeds (which amounted to $ 1.2 Billion) would be laundered and shared between the parties. It is also alleged that false insurance contracts were used to launder the $ 1.2 Billion profit.
An AFP article was quoted as stating “the real losers were probably individual citizens in India as the cost of production of gas is passed on to the consumers”.
The Enforcement Directorate (ED) has sought the Dutch Investigation report on the alleged money laundering via the over invoicing of bills and will now investigate the matter.
Reliance Industries meanwhile has vehemently denied all charges stating that it had not entered into a contract with any Dutch company for setting up of a gas pipeline.
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