New charges hit Adani Group, document trail claims to uncover hidden investors
An investigation by the Organised Crime and Corruption Reporting Project (OCCRP) has allegedly uncovered financial irregularities tied to the Adani Group. The OCCRP claims that millions of dollars were invested in Adani stocks via opaque Mauritius funds, obscuring the role of purported business partners.
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FollowThe Organised Crime and Corruption Reporting Project (OCCRP) has revealed that millions of dollars were invested in publicly traded stocks of India's Adani Group through "opaque" Mauritius funds that concealed the involvement of alleged business partners of the Adani family. Based on a review of documents from multiple tax havens and internal Adani Group emails, OCCRP's investigation identified at least two instances where investors utilized offshore structures to buy and sell Adani stock.
OCCRP's news report identified two individual investors, Nasser Ali Shaban Ahli and Chang Chung-Ling, who were involved in the investments investigated for the article. OCCRP characterized them as the Adani family's 'longtime business partners'. While there was no concrete evidence that Chang and Ahli's investments were funded by the Adani family, OCCRP reported that documents, including an agreement, corporate records, and an email, indicated that their trading in Adani stock appeared to be coordinated with the family. Asianet Newsable does not vouch for the authenticity of these findings.
The crux of determining whether this collaboration breaches legal boundaries hinges on whether Ahli and Chang should be classified as representatives of Adani "promoters," a terminology in India that designates the principal owners of a company. Should they fall under this classification, OCCRP claimed that their ownership in Adani holdings would exceed the permissible 75% threshold for insider ownership.
This development comes on the heels of allegations made in January by U.S.-based short-seller Hindenburg Research, which accused the Adani Group of engaging in improper business dealings, including the use of offshore entities in tax havens like Mauritius. These offshore funds were alleged to have surreptitiously owned shares in Adani's publicly listed companies.
The Adani Group strongly refuted Hindenburg's claims, asserting that they were misleading and lacked supporting evidence. The group maintained that it consistently adhered to legal regulations. However, in the aftermath of the January report, Adani group stocks experienced a significant loss of market value, with a decline of $150 billion. Although they have since shown some recovery following debt repayment and regained investor confidence, the stocks remain down approximately $100 billion.
'Timing raises suspicions, motivated by mischief and ill intent'
In response to OCCRP's findings, the Adani Group stated that the Mauritius funds under investigation by reporters had already been mentioned in the Hindenburg report. The group dismissed the allegations as baseless and unsubstantiated, asserting that they were essentially rehashed from Hindenburg's claims.
An independent adjudicating authority and an appellate tribunal have both affirmed the absence of over-valuation and the adherence to applicable legal norms in these transactions. This matter reached its conclusion in March 2023 when the Supreme Court of India ruled in our favor, the company statement said.
Clearly, given the absence of over-valuation, these allegations regarding fund transfers lack a valid basis, the company said, while highlighting that the Foreign Portfolio Investors (FPIs) are already under investigation by the Securities and Exchange Board of India (SEBI).
According to the Expert Committee appointed by the Supreme Court, there is no evidence of any violation of Minimum Public Shareholding (MPS) requirements or manipulation of stock prices.
These endeavours seem to be driven, among other objectives, by a desire to profit by devaluing our stock prices, and these short sellers are currently under scrutiny by various regulatory bodies, the Adani Group said, adding that given that the Supreme Court and SEBI are actively overseeing these matters, it's crucial to respect the ongoing regulatory procedures.
Stating that the company has unwavering confidence in the legal due process and maintains its conviction in the quality of its disclosures and corporate governance standards, the Adani Group said that the timing of these news reports raises suspicions and appears to be motivated by mischief and ill intent.
