The Adani Group has rejected a report by the Organized Crime and Corruption Reporting Project (OCCRP) alleging stock manipulation by the conglomerate. “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 said. 

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

“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,” it 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 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.” 

“Notably, these FPIs are already part of the investigation by the Securities and Exchange Board of India (SEBI). As per the Expert Committee appointed by the Supreme Court, there is no evidence of any breach of the Minimum Public Shareholding (MPS) requirements or manipulation of stock prices,” it added. 

As per the report, 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 report said. 

In at least two cases, representing Adani stock holdings that at one point reached $430 million, the mysterious investors turn out to have widely reported ties to the group's majority shareholders, the Adani family. 

The two men, Nasser Ali Shaban Ahli and Chang Chung-Ling, have longtime business ties to the family and have also served as directors and shareholders in Adani Group companies and companies associated with one of the family's senior members, Vinod Adani, the report said. 

Records show that the investment funds they used to trade in Adani Group stock received instructions from a company controlled by a senior member of the Adani family. 

Two men who secretly invested in the massive conglomerate turn out to have close ties to its majority owners, the Adani family, raising questions about violations of Indian law. 

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 company to advise them in their investments, the report said. 

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 holding and its affiliated parties. If so, their stake in the Adani Group would mean that insiders altogether owned more than the 75 per cent allowed by law.

“When the company buys its own shares above 75 per cent … it's not just illegal, but it's share price manipulation,” says Arun Agarwal, an Indian market specialist and transparency advocate."

“This way the company (creates) artificial scarcity, and thus increases its share value and thus its own market capitalisation,” the report said.

Adani Group stocks are trading down following the report. Adani Enterprises, Adani Ports, Adani Power down more than 2 per cent, Adani Green Energy down 3.5 per cent.