The Organized Crime and Corruption Reporting Project (OCCRP) claims to have landed on fresh evidence of widespread stock price manipulation within the ranks of Adani Group, India’s largest business conglomerate.
Investigative journalism network the OCCRP that large sums of Adani stock were held in opaque Mauritius-based investment funds managed by Adani insiders.
Two people named in documents obtained by the OCCRP, Nasser Ali Shaban Ahli and Chang Chung-Ling, are longtime business associates of the Adani family who have served as directors and shareholders in the group.
The documents allegedly show that, through the Mauritius funds, they spent years buying and selling Adani stock through obscure offshore structures, netting huge profits. Up to $430 million (£339 million) was thought to be held in these funds at one point.
Two of Gautam’s brother Vinod Adani’s close associates are named as sole beneficiaries of offshore companies through which the money was allegedly passed through.
Should it be determined that Ahli and Chang were acting on behalf of Adani Group, Adani promoters would have owned more than 75% of the holding company- an illegal amount under Indian laws.
“It’s not just illegal, but it’s share price manipulation,” Arun Agarwal, an Indian market specialist and transparency advocate, told the OCCRP.
Agarwal explained: “This way the company (creates) artificial scarcity, and thus increases its share value, and thus its own market capitalisation.”
“This helps them gain an image that they are doing very well, which helps them get loans, take valuations of companies to a new high, and then float new companies.”
Allegations pile up
Adani Group, which owns everything from India's telecoms infrastructure to major shipping ports, is closely linked to prime minister Narendra Modi, while founder Gautam Adani is India’s richest man.
The group came under fire from famed short seller Hindenburg Research in January, causing as much as $100 billion to be wiped from Adani’s market value.
“We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades,” wrote Hindenburg at the time. “Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities.”
Since then, little substantive evidence has emerged regarding these international companies.
However, The Guardian has corroborated the new evidence mentioned in the OCCRP’s report.
Responding to The Guardian, an Adanai spokesperson said: “Contrary to your claim of new evidence/proofs, these are nothing, but a rehash of unsubstantiated allegations levelled 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 to nor any basis for making any of the said allegations against the Adani Group and its promoters and we expressly reject all of them."