Partners of the Adani family used “mysterious” funds to invest in its shares – the media group

NEW DELHI, Aug 31 (Reuters) – Millions of dollars have been invested in some publicly traded shares of India’s Adani Group by “blurred” Mauritian funds that have “obscured” the involvement of alleged business associates of the Adani family, the Organized Crime and Corruption Reporting Project. (OCCRP) said in an article on Thursday.

Citing a review of files from multiple tax havens and internal emails to the Adani Group, the nonprofit Global Network for Investigative Journalists said two individual investors — Nasser Ali Shaban Ahli of Dubai and Chang Chong Ling of Taiwan — with “long-term business relationships” used the Adani family as These external structures to buy and sell shares of Adani.

Reuters has not independently verified OCCRP’s assertions.

Al-Ahly and Zhang did not respond to Reuters requests for comment. The Adani Group, which is controlled by billionaire Gautam Adani who was the third richest man in the world before the scandal broke in January, said it categorically rejects what it called the recycled allegations “in their entirety”.

The OCCRP report, which comes after US-based short seller Hindenburg Research accused the Adani Group in January of improper business dealings, sent shares of Adani Group companies lower Thursday and revived corporate governance concerns.

Shares of Adani Enterprises (ADEL.NS), the leader in the group, fell 3.5%, while shares of Adani Ports (APSE.NS), Adani Power (ADAN.NS), Adani Green (ADNA.NS) and Adani Total Gas declined. (ADNA.NS). ADAG.NS) and Adani Willmar (ADAW.NS) with between 2% and 4.5% each.

“If true, it could mean a breach of SEBI’s rules regulating the Indian financial market for publicly listed equities, which could affect the outcome or prompt SEBI to dig deeper in its ongoing investigation into the group,” said Lakshmanan R, Senior Research Analyst at CreditiSights.

SEBI, the Securities and Exchange Board of India, did not respond to Reuters requests for comment.

Days after the January report, shares of Adani Group lost $150 billion of their market value and remained down about $100 billion after recovering in recent months after paying down some debts and restoring some investor confidence.

family ties

Between them, at their investment peak in June 2016, Ahli and Chang each owned free equity in four units of the Adani Group — Adani Power, Adani Enterprises, Adani Ports, and Adani Transmissions — ranging from 8% to about 14% of the shares in the shares, the report said. Companies through two funds based in Mauritius.

At one point in time, the value of their investments in Adani funds amounted to $430 million, the report said.

Under Indian laws, every company needs to own 25% of its shares by public shareholders to avoid price gouging.

While the OCCRP said there was no evidence that Chang and Ahli’s money for their investments came from Adani’s family, its reports and documents — including agreement, company records and email — showed there was “evidence” that their trading in Adani shares was “orchestrated.” With family.”

She said Ahli and Chang were associated with the group companies as well as with Vinod Adani, who is Gautam Adani’s brother. Vinod Adani did not respond to a Reuters request for comment.

“The question of whether this arrangement is in violation of the law depends on whether Ahli and Chang should be considered acting on behalf of Adani promoters, a term used in India to refer to the majority of business owners.” He said.

If that were the case, OCCRP said, the promoters’ stake in Adani’s property would exceed the 75% limit allowed for inland ownership.

“Verified,” says Hindenburg.

Hindenburg said on Platform X on Thursday that the OCCRP report “corrected” the issues it pointed out with regard to offshore funds holding at least 13% public equity stakes in several Adani shares through Vinod Adani’s “Partners”.

Adani Group called Hindenburg’s claims in January misleading and without evidence and said it always complied with the laws.

In a statement to OCCRP, the Adani Group said that the Mauritian funds investigated by the journalists had already been mentioned in the Hindenburg report and that “the allegations are not only baseless and baseless, but have been paraphrased from the Hindenburg allegations.”

The Supreme Court of India has appointed a panel to oversee the SEBI investigation based on the Hindenburg Report. The committee said in May that the regulator had so far “left a vacuum” in investigations of suspected abuse.

Last week, the SEBI said its report was nearing completion and that its investigation into some of the offshore deals is taking time because some of the entities are located in tax haven jurisdictions. It added that the regulator “should take appropriate action based on the findings of the investigations”.

SEBI also said it examined one of the Adani Group’s transactions for violating minimum rules for a public flotation, an issue the OCCRP report also pointed out.

In an interview with a Guardian reporter, OCCRP said Zhang said he knew nothing about any secret Adani share purchases. Asked why journalists weren’t interested in his other investments, he said, “We are a simple company.”

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