Adani group financial scam: new allegations say Adani family invested in its own shares
India’s Adani Group seems to be once again embroiled in an alleged serious financial scam. The Guardian newspaper has alleged in one of its reports that it has seen documents of some such financial records abroad, in which this billionaire Indian family invested hundreds of millions of dollars in the Indian stock market by secretly buying shares of their own companies. Adani Group is the most powerful group of India due to its proximity to PM Modi of India.
The Securities and Exchange Board of India (SEBI) handed over evidence of suspected stock market manipulation by the Adani Group to the Indian government as early as 2014, according to documents brought to light by the Organized Crime and Corruption Reporting Project (OCCRP) and seen by the Guardian. Were. But after a few months, Narendra Modi came to power at the Center and SEBI lost interest in investigating the stock market manipulation of Adani Group. Adani Group’s wealth kept increasing since 2015.
In 2022, Gautam Adani, founder of the Adani Group, became India’s richest person and the world’s third richest person, with a net worth of more than $120 billion. But in January 2023, New York finance research firm Hindenburg, in a report, accused the Adani Group of committing the “biggest fraud in corporate history”.
The Hindenburg report also alleged that the Adani Group had used offshore companies to buy its own shares. With this, the market valuation of the group will reach a peak of $288 billion in 2022. However, the Adani group denied Hindenburg’s claims. But the effect of Hindenburg’s report was that the market value of Adani Group fell by $ 100 billion. Gautam Adani’s name removed from the list of world’s top 10 richest people. Adani Group had described Hindenburg’s report as a threat to India’s sovereignty.
The Guardian has reported in its report that OCCRP received some documents in this regard, which were shared with the Guardian and the Financial Times. The newly discovered documents reveal for the first time details of an unknown and complex offshore operation in Mauritius. This offshore operation appears to be controlled by Adani’s associates. This reveals that it was allegedly used to prop up the share prices of its group companies from 2013 to 2018. Till now, this offshore network of Adani Group remained impenetrable.
The revelations could have significant political implications for PM Narendra Modi, who has a 20-year-old relationship with Gautam Adani. Ever since the Hindenburg report came out, tough questions are being asked about Gautam Adani’s relations and alleged partnership with Modi. Modi is not getting free from these questions.
On the matter related to the new documents, the Adani Group said: “Contrary to the claim of new evidence/verification, these are nothing but repetition of baseless allegations made in the Hindenburg Report. Our response to the Hindenburg Report is available on our website. Suffice it to state that there is neither any truth nor any basis in the above allegations against Adani Group and its promoters and we categorically reject all of them.
See the sequence of offshore businesses: According to the Guardian, offshore documents show that in 2010, two associates of the Adani family, Chang Chung-ling and Nasser Ali Shaaban Ahli, began setting up offshore shell companies in Mauritius, the British Virgin Islands and the United Arab Emirates. Financial records show that four offshore companies set up by Chang and Ahli – who have both been directors of companies linked to Adani – funneled millions of dollars into a large investment fund in Bermuda called the Global Opportunities Fund (GOF). That money was invested in the Indian stock market since 2013.
The allegation is that these funds appear to have spent several years acquiring shares in Adani’s four listed companies: Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power and later Adani Transmission. These records shed light on how money in opaque offshore firms can secretly flow into shares of publicly listed companies in India. The allegations say that it appears that the investment decisions of these two funds were made under the guidance of an investment advisory company controlled by a known employee and associate of Dubai-based Vinod Adani.
According to the report, EIFF appears to have held more than $190 million of shares in three Adani entities in May 2014, while EMRF has invested about two-thirds of its portfolio in about $70 million of Adani stock. Both funds used money that came entirely from companies controlled by Chang and Ahli.
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