Adani family’s partners used ‘opaque’ funds to invest in its stocks: media group
MILLIONS of dollars were invested in some publicly traded stocks of India’s Adani Group via “opaque” Mauritius funds that “obscured” involvement of alleged business partners of the Adani family, the Organised Crime and Corruption Reporting Project (OCCRP) said in an article on Thursday (Aug 31).
Citing a review of files from multiple tax havens and internal Adani Group e-mails, non-profit media organisation OCCRP said that its investigation found at least two cases where the investors bought and sold Adani stock through such offshore structures.
The OCCRP article comes after US-based short-seller Hindenburg Research in January accused Adani Group of improper business dealings, including the use of offshore entities in tax havens such as Mauritius from where it said certain offshore funds “surreptitiously” owned stock in Adani’s listed firms.
Adani Group has characterised Hindenburg’s claims as misleading and without evidence, and said that it has always complied with laws.
In the days following the January report, Adani group stocks lost US$150 billion in market value, and remain down around US$100 billion following a recovery in recent months after it repaid some debt and regained some investor confidence.
In a statement to the OCCRP, Adani Group said that the Mauritius funds investigated by reporters had already been named in the Hindenburg report, and that the “allegations are not only baseless and unsubstantiated, but are rehashed from Hindenburg’s allegations.”
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“It is categorically stated that all the Adani Group’s publicly listed entities are in compliance with all applicable laws including the regulation relating to public share holdings,” it told the OCCRP, according to the news article.
Reuters has not independently verified the OCCRP’s assertions.
Adani Group did not immediately respond to a Reuters request for comment on the OCCRP report.
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Hindenburg saga
The Hindenburg report hit Gautam Adani hard. The billionaire leads the ports-to-energy conglomerate, and was until January the world’s third-richest person. The crisis forced him to shelve a US2.5 billion share sale and convince banks about his business credentials.
India’s Supreme Court later appointed a panel to oversee a market regulator probe based on the Hindenburg report. The panel in May said that the regulator had so far “drawn a blank” in investigations into suspected violations in overseas investments in the Adani Group.
Last week, the regulator said its report was nearing completion, and that its investigation on some offshore deals was taking time as some entities were located in tax haven jurisdictions. The regulator “shall take appropriate action based on the outcome of the investigations,” it said.
The regulator, the Securities and Exchange Board of India (SEBI), did not immediately respond to a Reuters request for comment on the OCCRP report.
The OCCRP report on Thursday named two individual investors who made the investments it investigated for its article – Nasser Ali Shaban Ahli and Chang Chung-Ling. They were described by the OCCRP as “longtime business partners” of the Adani family.
The media organisation said there was no evidence that Chang and Ahli’s money for their investments came from the Adani family, but noted that the group’s documents – including an agreement, corporate records and an e-mail – showed that there “is evidence” that their trading in Adani stock “was coordinated with the family.”
“The question of whether this arrangement is a violation of the law rests on whether Ahli and Chang should be considered to be acting on behalf of Adani ‘promoters’, a term used in India to refer to the majority owners of a business,” the OCCRP said. If so, their stake in Adani holdings would exceed the 75 per cent limit allowed for insider ownership, the OCCRP added.
Ahli and Chang did not respond to the OCCRP’s requests for comment, the news article said. Reuters could not immediately reach them for comment.
In an interview with a reporter from The Guardian, the OCCRP said that Chang said he knew nothing about any secret purchases of Adani stock. He asked why journalists were not interested in his other investments and said: “We are a simple business.” REUTERS
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