New Delhi: The Organised Crime and Corruption Reporting Project (OCCRP) Thursday published an article detailing claims about stock price manipulation by the Adani Group. The global non-profit media organisation said that millions of dollars were invested in publicly traded stocks of the Adani Group through “opaque” funds routed via Mauritius.
These investments allegedly hid the involvement of business partners of the Adani family.
If true, this would be in contravention of Indian markets regulator Securities and Exchange Board of India’s (SEBI) rules on transactions with related parties and its norms on the maximum shareholding a promoter can have in a listed company.
The OCCRP investigation, drawing from files sourced from various tax havens and internal Adani Group emails, highlighted at least two instances where investors used offshore structures to conduct transactions involving Adani stocks.
The article comes on the heels of accusations made earlier this year by US-based short-seller Hindenburg Research. Hindenburg’s report had accused the Adani Group of improper business dealings, including the utilisation of offshore entities in tax havens such as Mauritius.
OCCRP, in its report, disclosed the names of the two individual investors who were investigated: Nasser Ali Shaban Ahli and Chang Chung-Ling. These individuals were described as “longtime” business partners of the Adani family. While no direct evidence links their investments to the Adani family’s funds, OCCRP’s investigation suggested coordination between their stock trading and the family’s actions.
The question of potential legal violations hinges on whether Ahli and Chang are considered to be acting on behalf of Adani as “promoters”. This is a term used in Indian law to refer to the majority owners of a business. If they are, their stake in Adani holdings might exceed the allowable limit for promoter ownership.
Both individuals have yet to respond to OCCRP’s requests for comment.
The Adani Group, meanwhile, has firmly rejected OCCRP’s claims. In a statement, the group characterised the allegations as “recycled” and as being part of a larger effort by “Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report”. It also asserted that this had been anticipated and reported in the media the previous week.
The statement by the group added that the allegations stemmed from closed cases dating back a decade and lacked relevance due to the absence of “over-valuation”.
The group highlighted that the Foreign Portfolio Investors (FPIs) implicated were already under scrutiny by SEBI. “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,” it said.
Amid these allegations and ongoing investigations, the Adani Group reaffirmed its faith in the legal process and maintained its confidence in the quality of its disclosures and corporate governance standards. In light of these facts, the group deemed the timing of the news reports to be “suspicious, mischievous, and malicious”.
Also read: Biden approves military aid to Taiwan under FMF program normally used for sovereign states