New Delhi: Billionaire Gautam Adani’s group was on Thursday hit by fresh allegations that it used family associates to secretly invest hundreds of millions of dollars through “opaque” Mauritius-based investment funds to fuel the spectacular rise in group stocks. The conglomerate vehemently denied the charge.
The Organised Crime and Corruption Reporting Project (OCCRP) said documents obtained by it revealed details of a complex offshore operation in two Mauritius-based funds managed by the partners of the promoter family to support prices of shares of group companies from 2013 to 2018 - a period during which the ports-to-energy conglomerate saw meteoric rise to become India’s largest and most powerful businesses.
OCCRP said two close associates of Vinod Adani — the elder brother of group founder, and chairman Gautam Adani — are sole beneficiaries of Mauritius-based companies through which the money appeared to flow. Nasser Ali Shaban Ahli from the UAE and Chang Chung-Ling from Taiwan spent years trading hundreds of millions of dollars worth of Adani group stock through two Mauritius-based funds that were overseen by a Dubai-based company run by a known employee of Vinod Adani.
Market regulator SEBI had been handed evidence in early 2014 of alleged suspicious stock market activity by the Adani Group, OCCRP said citing a letter. U K Sinha, who headed the SEBI in 2014, is now a director and chairperson of Adani-owned NDTV.
On the OCCRP allegations, the Group on Thursday termed them as “recycled allegations” and called them “yet another concerted bid by (George) Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report”.
On the allegation of about $1 billion of over-invoicing scam money being routed to the two Mauritius funds, it said, “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.”
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, it said, adding the matter attained finality in March 2023 when the Supreme Court of India ruled in the group’s favour.
“Clearly, since there was no over-valuation, there is no relevance or foundation for these allegations on transfer of funds,” it said. 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,” the OCCRP said. “They also show that the management company in charge of their investment paid a Vinod Adani company to advise them in their investments.”
The trove of documents lays out a complex web of companies that date back to 2010, when Chang Chung-Ling and Nasser Ali Shaban Ahli, who have both been directors of Adani-linked companies, began setting up offshore shell companies in Mauritius, the British Virgin Islands and the United Arab Emirates.
Four offshore companies established by them sent hundreds of millions of dollars into a large investment fund in Bermuda called Global Opportunities Fund (GOF), with those monies invested in the Indian stock market from 2013 onwards. Another layer of opacity was introduced as the money from the duo’s offshore companies flowed from GOF into two funds to which GOF subscribed: Emerging India Focus Funds (EIFF) and EM Resurgent Fund (EMRF).
These funds then appear to have spent years acquiring shares in four Adani-listed companies — Adani Enterprises, Adani Ports and SEZ, Adani Power and Adani Transmission.
The foreign portfolio investors named in the OCCRP report “are already part of the investigation by the Securities and Exchange Board of India (SEBI)”, Adani Group said. “As per the Expert Committee appointed by the Hon’ble Supreme Court, there is no evidence of any breach of the Minimum Public Shareholding (MPS) requirements or manipulation of stock prices.”
“These attempts are aimed at, inter alia, generating profits by driving down our stock prices and these short sellers are under investigation by various authorities. As the Supreme Court and SEBI are overseeing these matters, it is vital to respect the ongoing regulatory process,” 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. In light of these facts, the timing of these news reports is suspicious, mischievous and malicious - and we reject these reports in their entirety.”