Adani scandal: Fresh accusations of stock manipulation levelled against India company
The Group denies any wrongdoing after an OCCRP report that millions were invested in Adani stocks by ‘opaque’ Mauritius-based funds
India’s Adani Group is in the eye of yet another storm after non-profit media organisation Organised Crime and Corruption Reporting Project (OCCRP) said that millions of dollars were invested in publicly traded stocks of the Group via “opaque” Mauritius funds.
Adani Group was the focus of a stinging report in January by US-based short-seller Hindenburg Research, which accused the Group of fraudulent activities and financial manipulations.
The essence of the new allegations was the same as Hindenburg – that some of the Adani Group’s key ‘public’ investors were in fact Adani insiders, a possible violation of Indian securities law.
In the report, OCCRP said: “Exclusive documents obtained by OCCRP and shared with The Guardian and Financial Times – including files from multiple tax havens, bank records, and internal Adani Group emails – shed light on that very matter.
“These documents, which have been corroborated by people with direct knowledge of the Adani Group’s business and public records from multiple countries, show how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in the island nation of Mauritius.”
The OCCRP report named two individual investors who made the investments it investigated for its article – Nasser Ali Shaban Ahli and Chang Chung-Ling – who were described as “longtime business partners” of the Adani family.
OCCRP said there was no evidence Chang and Ahli’s money for their investments came from the Adani family, but said its reporting and documents – including an agreement, corporate records and an email – showed there is evidence that their trading in Adani stock “was coordinated with the family”.
“The documents show that, through the Mauritius funds, they spent years buying and selling Adani stock through offshore structures that obscured their involvement — and made considerable profits in the process. They also show that the management company in charge of their investments paid a Vinod Adani (family member) company to advise them in their investments,” said the OCCRP report.
Hindeburg report ‘a malicious combination of selective misinformation and stale,’ says Adani
Adani Group had called the Hindenburg reports misleading and reacting to the OCCRP report, it released a statement saying: “We categorically reject these recycled allegations. These news reports appear to be yet another concerted bid by Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report. In fact, this was anticipated, as was reported by the media last week.”
The Group stocks lost $150 billion in market value following the publishing of the report and remain down around $100 billion. The company had to shelve a $2.5 billion IPO at the time, but has recovered in recent months after repaying debts and gaining regained some investor confidence.
Adani Group said that the claims are based on cases that have been closed more than a decade ago when the Directorate of Revenue Intelligence (DRI) launched a probe into the company.
“These claims are based on closed cases from a decade ago when the Directorate of Revenue Intelligence (DRI) probed allegations of over-invoicing, transfer of funds abroad, related party transactions and investments through FPIs,” the Adani Group statement said.
“An independent adjudicating authority and an appellate tribunal had both confirmed that there was no over-valuation and that the transactions were in accordance with applicable law. The matter attained finality in March 2023 when the Honourable Supreme Court of India ruled in our favour. Clearly, since there was no over-valuation, there is no relevance or foundation for these allegations on transfer of funds.”
Adani scandal: Congress leader Rahul Gandhi demands parliamentary probe on the issue
India’s “global reputation is on the line”, Gandhi said, after the OCCPP report, carried by London’s Guardian and The Financial Times, alleged financial violations by the politically connected Adani family
The Adani saga heated up on Thursday with Congress leader and leading opposition face in India Rahul Gandhi demanding that the prime minister Narendra Modi order a parliamentary investigation into the latest allegations contained in a report by Organised Crime and Corruption Reporting Project (OCCPP).
India’s “global reputation is on the line”, Gandhi said, after the report, carried by London’s The Guardian and The Financial Times, alleged financial violations by the politically connected Adani family.
India’s Rahul Gandhi calls Adani Group out
Speaking at a press conference on Thursday, Gandhi, holding aloft a copy of The Guardian article detailing how Adani Group associates had appeared to use opaque offshore funds to secretly invest hundreds of millions of dollars into shares of their own Adani Group companies, demanded that a parliamentary investigation be ordered into the Adani Group immediately.
दुनिया के दो बड़े अखबारों ने प्रधानमंत्री और अडानी के रिश्ते पर सवाल उठाए हैं – ये हिंदुस्तान की इज्ज़त पर दाग है।
प्रधानमंत्री जी, ये रिश्ता क्या कहलाता है?
आप अडानी पर full scale जांच करने से क्यों घबरा रहे हैं? pic.twitter.com/oGWWfYkQuI
— Rahul Gandhi (@RahulGandhi) August 31, 2023
“Why is this one gentleman who is close to the prime minister, allowed to move [hundreds of millions] of dollars to pump up his share price and to use the money to capture Indian assets such as airports and ports, ” Gandhi asked, the Guardian reported.
Though Adani has denied any favourable treatment, since Modi was elected in 2014 the conglomerate has expanded to become one of the largest in India – with monopolies over everything from power and ports to coal and airports – and has been awarded some of the largest and most lucrative state infrastructure contracts.
Gandhi said the Adani revelations called into question the transparency and integrity of India’s financial and economic systems at a time when the country was declaring itself open for global business.
Significantly, the resurfacing of the Adani controversy comes at a wrong time for the Modi government, which is all set to hold the G20 Summit in Delhi on September 9-10, with US President Joe Biden and the UK Prime Minister Rishi Sunak, among other global leaders, in attendance.
In a statement released on Thursday morning, the Adani Group said it rejected the reports “in their entirety”. It said: “We have complete faith in the due process of law and remain confident of the quality of our disclosures and corporate governance standards.”
The Modi government so far gave no response to the allegations.
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