The Organised Crime and Corruption Reporting Project (OCCRP) has made fresh allegations against the Adani Group of companies, alleging that millions of dollars were invested in publicly traded Adani Group stocks using ‘opaque’ funds based in Mauritius.
OCCRP reported that during its investigation, they discovered at least two cases when investors acquired and sold Adani stock using such offshore structures, citing a review of data from multiple tax havens and internal corporate emails.
Allegations Against Adani Group
The report comes eight months after US-based short seller Hindenburg Research accused the ports-to-energy conglomerate of improper business transactions, including the use of offshore firms in tax havens.
Adani Group is involved in various industries, including transportation and logistics, natural gas distribution, coal trading and production, power generation and transmission, road building, data centres and real estate, the report stated.
Documents obtained by the OCCRP, and shared with the Financial Times and the Guardian, allegedly show hundreds of millions of dollars being invested in the Adani Group’s publicly traded firms “through opaque investment funds based in the island nation of Mauritius.”
According to the investigation, Nasser Ali Shaban Ahli from the UAE and Chang Chung-Ling from Taiwan were the primary investors in Adani stocks and made investments through a complex network of offshore funds.
NEW: The Adani Group is one of India’s top conglomerates and is widely linked to Prime Minister Modi. It’s also been rocked by accusations of stock manipulation.
— Organized Crime and Corruption Reporting Project (@OCCRP) August 30, 2023
Now reporters have found new evidence that sheds light where the authorities couldn’t. :point_down:https://t.co/dzz1ZNC4Hv
The report states that Ahli and Chang have long maintained close relations with the Adani family, including by serving as directors in Adani Group companies and firms associated with Gautam Adani’s elder brother, Vinod Adani, and “spent years buying and selling Adani stock through offshore structures that obscured their involvement — and made considerable profits in the process.”
According to the records, Ahli and Chang held around 13%-14% of the publicly accessible shares in three Adani group firms, including the flagship Adani Enterprises, in January 2017.
As per Indian law, promoters of a publicly listed firm cannot own more than 75% of the company’s shares, which implies that if Ahli and Chang acted at Adani’s request, the company may have violated securities law, the report stated.
According to the OCCRP report, “The Adani Group’s rise has been staggering, growing from under $8 billion in market capitalisation in September 2013 — the year before Narendra Modi became prime minister — to $260 billion last year.”
Hindenburg Probe on Adani Group
In a January investigation, Hindenburg Research claimed that the Adani Group was committing the “largest con in corporate history.” According to Hindenburg, the conglomerate was implicated in accounting fraud, improper use of tax havens, and money laundering.
Following the Hindenburg Research discoveries in January, the Indian Supreme Court formed an expert committee to investigate the claims. The committee’s findings, which were made public in May, indicated that the Adani Group had already been investigated by the Securities and Exchange Board of India (SEBI).
According to reports, SEBI has suspected for years that “some of [the Adani Group’s] public shareholders are not truly public shareholders and they could be fronts for [Adani Group] promoters.”
In 2020, it initiated a probe into 13 foreign companies holding Adani shares. However, the probe “hit a wall”, the report had said.
Adani Group’s Response
The Adani Group made a media statement shortly after the accusations were published, claiming that these were “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,” the statement said.
Adani Group said in a statement to OCCRP that the Mauritius funds inspected by reporters were previously listed in the Hindenburg investigation and that the “allegations are not only baseless and unsubstantiated, but are rehashed from Hindenburg’s allegations.”
According to the conglomerate, “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.”