 "Adani group companies' shares feel OCCRP pinch, decline by up to 4%")
The shares of Adani group companies on Thursday after news reports based on documents released by a group of investigative journalists alleged that offshore entities controlled by the Adani family’s associates made millions in profits, which were used to support the group’s share prices between 2013 and 2018.
Barring ACC, which rose by 0.47 per cent, the Adani group stocks fell between 2.2 per cent and 4.4 per cent, reducing the combined market capitalisation of group companies by around Rs 36,000 crore.
This has dealt a fresh blow to the ports-to-power conglomerate, already reeling from the impact of the US-based short-seller Hindenburg Research’s accusations, made on January 24 this year, of corporate fraud and stock market manipulation.
The group has since suffered a decline of Rs 8.4 trillion in market capitalisation.
In documents released to two British newspapers, OCCRP has alleged that hundreds of millions of dollars were invested in publicly traded Adani stocks through opaque investment funds based in Mauritius. In two cases, the investors are said to have ties with the Adani family.
Refuting all allegations, the Adani group said these offshore entities were already part of an investigation by the Securities and Exchange Board of India (Sebi).
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The expert committee appointed by the Supreme Court (SC) has not found any evidence of breach of the minimum public shareholding (MPS) requirements or manipulation of stock prices.
“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 group said in a statement.
OCCRP, which is funded by George Soros and Rockefeller Brothers Fund, has named Nasser Ali Shaban Ahli and Chang Chung-Ling — who allegedly have business ties with the Adani family and served as officials and shareholders in the Adani group and firms owned by Gautam Adani's brother Vinod Adani — as fronts used to amass shares and build large trading positions.
The reports claimed that these two individuals spent years buying and selling Adani group stocks through offshore entities, and raised questions about whether they acted on Adani group promoters' behalf.
The company in charge of their investments paid a firm owned by Vinod Adani to advise them, the reports said. They also questioned whether Adani group insiders used these entities to bypass India's minimum public shareholding norms and artificially inflate share prices.
The Adani group termed the reports yet another attempt, supported by a section of the foreign media, to revive the Hindenburg report.
U R Bhat, co-founder of investment platform Alphaniti Fintech, said there was nothing incremental in OCCRPs' allegations.
"Sebi has submitted a report on most allegations against the Adani group. Whether the new reports will prompt them to start one more investigation is something one needs to see. Sebi may not investigate beyond a point due to jurisdictional constraints. Stock volatility will continue until the group clarifies that these allegations are wrong. The onus is now on the group to clarify the matter to the satisfaction of investors,” Bhat said.
The OCCRP report has come days before a scheduled SC hearing where Sebi is likely to present the findings of its probe into allegations made by Hindenburg Research.