MUMBAI - Adani Group shares and bonds fell after potentially controversial owners of Adani stock were identified in a new investigation, dealing the Indian conglomerate a fresh blow after short-seller Hindenburg Research alleged the group engaged in corporate fraud and stock price manipulation.
All 10 listed Adani stocks retreated in Thursday trading and most of the group’s US dollar bonds also fell. Shares of flagship Adani Enterprises dropped as much as 5.2 per cent before paring losses.
Documents obtained by staff at the Organised Crime and Corruption Reporting Project (OCCRP) show that Mr Nasser Ali Shaban Ahli from the United Arab Emirates and Mr Chang Chung-Ling from Taiwan spent years trading hundreds of millions of dollars’ worth of Adani Group stock, the global network of investigative journalists alleged on Thursday in a highly anticipated report.
The OCCRP said on its website that the two men have long-time business ties to the Adani family and have served as directors and shareholders in Adani Group companies, along with businesses associated with Mr Vinod Adani, who is the brother of the conglomerate’s founder, billionaire Gautam Adani.
The documents were corroborated by people with direct knowledge of the Adani Group’s businesses and public records from multiple countries, the OCCRP added, and show how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in Mauritius.
“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,” the OCCRP found.
“They also show that the management company in charge of their investments paid a Vinod Adani company to advise them in their investments.”
Adani Group said in a Thursday statement that it “categorically” rejected the OCCRP findings and accused the investigative journalism network of seeking to profit by “driving down our 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,” it said. “In light of these facts, the timing of these news reports is suspicious, mischievous and malicious.”
Mr Nitin Chanduka, a strategist at Bloomberg Intelligence, said: “Adani Group shares will likely consolidate until more clarity emerges on the ownership structure.”
The OCCRP investigation is yet another broadside against the ports-to-power conglomerate, which has been firefighting the allegations of wide-ranging corporate malfeasance made in January.
That Hindenburg report prompted a probe by Indian regulators and wiped out more than US$150 billion (S$202 billion) in market value from Adani’s listed companies at one point.
The conglomerate has denied any wrongdoing.
Shares in Adani Group companies have recouped around US$43 billion as the conglomerate’s founders pared back debt and raised billions of dollars selling stock to overseas investors such as GQG Partners and Qatar Investment Authority.
The Securities and Exchange Board of India (Sebi), the country’s capital markets watchdog, said a probe into the Adani Group showed violations of rules on disclosures by listed entities and limits on the holdings of offshore funds, Reuters reported on Monday, citing sources it did not identify.
“This news will increase the volatility for investors till Sebi’s final findings on its Adani investigation get disclosed,” said Mr Sameer Kalra, founder of Target Investing.
“It’s another piece of evidence showing concentration of shareholding from the past, and it creates an overhang for smaller investors even as new large funds such as GQG are coming in.” BLOOMBERG, AFP
