In a statement, the Adani Group rejected the allegations and termed them “mischievous and malicious”. File
| Photo Credit: Reuters
Adani Group companies’ shares fell on Thursday, with the flagship Adani Enterprises sliding as much as 5%, in the wake of a report by the Organized Crime and Corruption Reporting Project (OCCRP) that sought to affirm earlier allegations of share price manipulation by people close to the promoters.
In a statement, the Adani Group rejected the allegations and termed them “mischievous and malicious”.
The OCCRP, a global network of investigative journalists, alleged in its report released on Thursday that documents obtained by the reporters show that “two men who spent years trading hundreds of millions of dollars’ worth of Adani Group stock: Nasser Ali Shaban Ahli and Chang Chung-Ling, had close ties to the Adani family, including appearing as directors and shareholders in affiliated companies”.
“Records show that the investment funds they used to trade in Adani Group stock received instructions from a company controlled by a senior member of the Adani family the OCCRP said in its report.
Shares of Adani Enterprises had pared losses and were trading 2.3% lower on the BSE at ₹2,457 as of 12:49 p.m. Adani Ports & Special Economic Zone Ltd. was also down 2.3% while Adani Power was 2.9% lower and Adani Green Energy was down 3.4%.
“These news reports appear to be yet another concerted bid… to revive the meritless Hindenburg report,” the Adani Group said in its statement, referencing the January report by U.S.-based Hindenburg Research, in which the short seller had alleged that the Indian conglomerate had indulged in corporate fraud and share price manipulation.
“These claims are based on closed cases from a decade ago when the Directorate of Revenue Intelligence (DRI) probed allegations of over invoicing, transfer of funds abroad, related party transactions and investments through FPIs (foreign portfolio investors),” the Adani Group asserted.
“The matter attained finality in March 2023 when the Hon’ble Supreme Court of India ruled in our favour. Clearly, since there was no over-valuation, there is no relevance or foundation for these allegations on transfer of funds,” the group said, adding that these FPIs were already part of the investigation by the Securities and Exchange Board of India (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,” the group asserted.
“We have complete faith in the due process of law and remain confident of the quality of our disclosures and corporate governance standards. In light of these facts, the timing of these news reports is suspicious, mischievous and malicious – and we reject these reports in their entirety,” the Adani Group added.
‘Mauritius route’
As per the OCCRP’s allegations, documents show how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in Mauritius.
“In at least two cases — representing Adani stock holdings that at one point reached $430 million — the mysterious investors turn out to have widely reported ties to the group’s majority shareholders, the Adani family,” the reporters’ collective alleged in its report.
“The documents show that, through the Mauritius funds, they spent years buying and selling Adani stock through offshore structures that obscured their involvement — and made considerable profits in the process. They also show that the management company in charge of their investments paid a Vinod Adani company to advise them in their investments,” the OCCRP said in its report.
“The question of whether this arrangement was a violation of the law rests on whether Ahli and Chang should be considered to be acting on behalf of Adani “promoters,” a term used in India to refer to the majority owners of a business holding and its affiliated parties.
“If so, their stake in the Adani Group would mean that insiders altogether owned more than the 75% allowed by law,” it added.