Reports by Organized Crime and Corruption Reporting Project (OCCRP), an investigative platform, The Financial Times and The Guardian also alleged that Adani Group violated markets regulator Sebi’s minimum shareholding norm and used layered fund structures to evade regulatory scrutiny. They alleged that Vinod Adani, brother of group chairman Gautam Adani, and his two associates were linked to the irregularities.
The day’s trading ended with just one of the 10 Adani group companies — cement major ACC — posting marginal gains, while all the others were in the red. Among the nine laggards, Adani Green closed 4.4% lower, group flagship Adani Enterprises was down 3.8% and Ambuja Cements down 3.5%.
Shareholders in the Adani group collectively lost Rs 35,711 crore on Thursday with the group’s total market capitalisation now at Rs 10.5 lakh crore, BSE data showed. The selling in these stocks came despite a strong rebuttal from the Adani Group that termed the allegations ‘recycled’.
According to the reports, based on new documents received mainly from Mauritius, two individuals — Nasser Ali Shaban Ahli from UAE and Chang Chung-Ling from Taiwan – allegedly used Mauritius-based funds to invest as much as $430 million in Adani Group companies. In 2017, these funds allegedly controlled about 13% of free float in three of the four listed Adani group companies, including Adani Enterprises.
“These documents, which have been corroborated by people with direct knowledge of the Adani Group’s business and public records from multiple countries, show how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in the island nation of Mauritius,” OCCRP said on its website.
The reports said the funds invested in Adani Group’s stocks had come from Vinod Adani into two Mauritius-based entities — Emerging India Focus Fund and EM Resurgent Fund — registered as foreign portfolio investors (FPIs) with Sebi.
The money in these two funds followed “a convoluted trail, making it exceedingly difficult to follow. It was channelled through four companies and a Bermuda-based investment fund called Global Opportunities Fund (GOF). The four companies used in the investments were Lingo Investment, owned by Chang; Gulf Arij Trading FZE (UAE), owned by Ahli; Mid East Ocean Trade (Mauritius), of which Ahli was the beneficial owner; and Gulf Asia Trade & Investment, of which Ahli was the controlling person,” the OCCRP report said.
OCCRP also said Ahli and Chang had a long association with the Adanis and had even been on the boards of some of its arms.
In 2014, the directorate of revenue intelligence had written to Sebi sharing data on possible routing of “siphoned off funds” into Adani Group.
Sebi did not respond to TOI’s request for its comments on alleged violations of its rules by Adani Group. Usually, the regulator doesn’t comment on entities it regulates.
The first serious allegation against the group had emerged on January 24 this year when US-based short seller Hindenburg Research came out with a 100-plus-page report alleging stock price manipulation, cooking of books of accounts and non-disclosure by Adani companies over several years. The group subsequently lost nearly $150 billion worth of market value in about five weeks. Gautam Adani also dropped from being the second richest person in the world to 24th by end-February. Since then, stock prices of the group’s companies have recovered partially.