Two investors who pumped hundreds of millions of dollars into the Adani group through offshore funds have close ties to its founders, the Organized Crime and Corruption Reporting Project claimed in a report released on Thursday.

This raises questions about a possible breach of Indian stock exchange rules.

The investment in Adani shares was made through “opaque” Mauritius-based mutual funds, the global network of investigative journalists claimed. These were founded by two employees of the Adani family – Chang Chung-Ling from Taiwan and Nasser Ali Shaban Ahli from the United Arab Emirates.

According to the OCCRP, both men have longstanding business ties with the Adani family and have been directors and shareholders of the Adani Group companies. They are also associated with Vinod Adani, the older brother of faction leader Gautam Adani.

The Financial Times And The guard collaborated with OCCRP on the report.

American investment firm Hindenburg Research claimed in January that Vinod Adani was responsible for creating and managing a vast network of offshore shell companies dedicated to stock parking, market manipulation and money laundering to help the conglomerate’s companies appear more financially to keep health.

Documents viewed by OCCRP appeared to show that Chang and Ahli invested a large amount of money in the Mauritius funds between 2013 and 2013, which was subsequently used to trade shares of four Adani companies – Adani Power, Adani Enterprises, Adani Ports and Adani Transmissions – was used in 2018.

The media organization said while there was no evidence that Chang and Ahli’s money for their investments came from the Adani family, there was evidence that their trading in Adani shares “was coordinated with the family.”

At one point in March 2017, the value of their investments in Adani Group shares was US$430 million (3,552 crores), the report said.

The development raises questions about a potential violation of the Securities Contract (Regulation) Act, which requires public ownership of at least 25% in publicly traded companies.

According to OCCRP, at the height of their investment, Ahli and Chang alone held between 8% and 13.5% of the public shares of four Adani companies.

Arun Agarwal, a stock market specialist and advocate for transparency, told OCCRP that it is illegal for any company to hold more than 75% of its shares.

“If the company buys more than 75% of its own stock, it’s not only illegal, it’s manipulation of the stock price,” Agarwal added. “In this way the company [creates] artificial scarcity and thus increases the share value and thus your own market capitalization.”

Investigating the Hindenburg Report

On Jan. 24, Hindenburg Research claimed in a report that the Adani Group committed the “biggest fraud in the company’s history.” Hindenburg claimed the conglomerate was involved in accounting fraud, abusive use of tax havens and money laundering.

The Adani Group had denied these allegations, but the report still weighed on the shares of the conglomerate’s listed companies.

In May, a panel of experts set up by the Supreme Court to oversee the investigation into the Adani Group said it could not, at first glance, conclude that there was a regulatory failure in the case.

The panel had noted that the Securities and Exchange Board of India “did not find a loophole” in its investigation into alleged foreign investment violations at the Adani Group, adding that its investigation in the case would be a “landless voyage”. could.

In court proceedings, the market supervisory authority also denied having initiated investigations against the Adani Group in the past.

However, a document found by OCCRP during its investigation suggests that the Directorate of Revenue Intelligence had told SEBI in 2014 that it had evidence of the activities of the “offshore funds” linked to the Adani group.

“There is evidence that some of the siphoned money may have found its way to the stock markets in India as an investment and divestment in the Adani Group,” Najib Shah, director-general of the Directorate of Revenue Intelligence, had told SEBI.

However, an unidentified SEBI official said the regulator’s interest in investigating the alleged offshore accounts linked to the Adani group appeared to have disappeared after Narendra Modi was elected prime minister in 2014, a report said The guard.

Adani denies the allegations

For its part, the Adani Group is a opinion On Thursday, the company categorically denied what it described as “recycled allegations,” claiming the timing of the news reports was suspicious, spiteful and malicious.

The group said the reports appeared to be another “concerted attempt” by “interests” funded by Hungarian-American businessman George Soros to reignite the Hindenburg allegations.

“Furthermore, it is categorically declared that all Adani Group listed companies comply with all applicable laws, including regulations on public ownership,” the conglomerate told OCCRP.

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