The essence of the allegations was that some of the Adani Group’s key “public” investors were in fact Adani insiders, a possible violation of Indian securities law. But none of the agencies contacted by the committee were able to identify those investors, since they were hidden behind secretive offshore structures.
Now, exclusive documents obtained by OCCRP and shared with The Guardian and Financial Times — including files from multiple tax havens, bank records, and internal Adani Group emails — shed light on that very matter.
These documents, which have been corroborated by people with direct knowledge of the Adani Group’s business and public records from multiple countries, show how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in the island nation of 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 two men, Nasser Ali Shaban Ahli and Chang Chung-Ling, have longtime business ties to the family and have also served as directors and shareholders in Adani Group companies and companies associated with one of the family’s senior members, Vinod Adani.
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 question of whether this arrangement is 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 percent allowed by law.
“When the company buys its own shares above 75 percent … it’s not just illegal, but it’s share price manipulation,” says Arun Agarwal, an Indian market specialist and transparency advocate. “This way the company [creates] artificial scarcity, and thus increases its share value — and thus its own market capitalization.”
“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,” he said.
In response to requests for comment for this story, a representative of the Adani Group noted that the Mauritius funds investigated by reporters had already been named in the “Hindenburg report,” referring to the short-seller that sparked this year’s scandal. (The report did name these offshore companies, but did not reveal who was using them to make investments in Adani stock.)
The Adani representative also cited the Supreme Court’s expert committee, which described a financial regulator’s efforts to get to the bottom of the matter as “not proved.”
“In light of these facts,these allegations are not only baseless and unsubstantiated but are rehashed from Hindenburg’s allegations,” the representative wrote. “Further, it is categorically stated that all the Adani Group’s publicly listed entities are in compliance with all applicable laws including the regulation relating to public share holdings.”
Ahli and Chang did not respond to OCCRP’s requests for comment.
In an interview with a reporter from the Guardian, Chang said he knew nothing about any secret purchases of Adani stock. He did not say whether he had bought any, but asked why journalists were not interested in his other investments. “We are a simple business,” he said, before ending the interview.
Vinod Adani did not respond to requests for comment. Though the Adani Group has denied that he has a role in running the conglomerate, it admitted this March that he was part of its “promoter group” — meaning he had control over the affairs of the company and was meant to be informed of all holdings in Adani Group stock. An Adani Group representative told reporters that Vinod Adani’s involvement had been “duly disclosed,” adding that he is a “foreign national … residing abroad for the last three decades,” and “does not hold any managerial position in any Adani listed entities or their subsidiaries.”
‘Brazen Stock Manipulation’
The Adani Group’s rise has been staggering, growing from under $8 billion in market capitalization in September 2013 — the year before Modi became prime minister — to $260 billion last year.
The conglomerate is active in a dizzying array of fields, including transportation and logistics, natural gas distribution, coal trade and production, power generation and transmission, road construction, data centers, and real estate.
It has also won many of the state’s largest tenders, including 50-year contracts to operate or redevelop a number of India’s airports. Recently, it even took a controlling stake in one of the country’s last independent television stations.
But Adani’s rise has not been without controversy. Opposition politicians allege that the firm has received preferential treatment from the government to secure its lucrative state contracts. Analysts also describe its chairman, Gautam Adani, as benefiting from a cozy relationship with Modi. Adani has denied that Modi or his policies are responsible for his business empire’s success.
The conglomerate suffered a major setback at the end of January when the New York-based short seller, Hindenburg Research, issued its scathing report, claiming that the group had spent decades engaged in “brazen stock manipulation” and “accounting fraud.”
Gautam Adani, the headline read, was “pulling the largest con in corporate history.”
The central issue, the report claimed, was that the company was in violation of Indian securities law, which requires at least 25 percent of the stock of any publicly traded company to be available to the public for purchase.
Following the report’s publication, shares in the group’s companies plummeted. Gautam Adani lost more than $60 billion in just a few days, dropping from third-richest man in the world to 24th.
In response, the Adani Group issued denials and wrapped itself in the Indian flag. “This is not merely an unwarranted attack on any specific company,” the Group wrote in a note to stakeholders, “but a calculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India.”
Many investors appear to have bought this narrative, with shares of major Adani group companies recovering much of their losses.
Hitting a Wall
Meanwhile, in response to the Hindenburg report, India’s Supreme Court convened an expert committee to look into the allegations. The committee’s conclusions, published this May, revealed that the Adani Group had already been investigated by SEBI, the Indian financial regulator.
According to the committee, SEBI had suspected for years that “some of [the Adani Group’s] public shareholders are not truly public shareholders and they could be fronts for [Adani Group] promoters.” In 2020, it launched an investigation into 13 overseas entities holding Adani stock.
But the investigation “hit a wall,” the expert committee’s report reads, because SEBI investigators could not conclusively determine who was behind the money.
Attempting to do so would be a “journey without a destination,” the committee concluded, because multiple layers of opaque corporate ownership could be used to disguise the ultimate owners of the stock.
Documents obtained by reporters do, however, reveal the “destination” in two cases involving two of the 13 offshore entities: A pair of Mauritius-based investment funds.
From the outside these funds, called Emerging India Focus Fund (EIFF) and EM Resurgent Fund (EMRF), appear to be typical offshore investment vehicles, operated on behalf of a number of wealthy investors.
Documents obtained by reporters show that a large percentage of the money was placed into these funds by two foreign investors — Chang from Taiwan and Ahli from the United Arab Emirates — who used them to trade large amounts of shares in four Adani companies between 2013 and 2018.
At one point in March 2017, the value of the investments in Adani Group stock was $430 million.
The money followed a convoluted trail, making it exceedingly difficult to follow. It was channeled through four companies and a Bermuda-based investment fund called the Global Opportunities Fund (GOF).
According to documents obtained by reporters, these investments resulted in significant profits, netting hundreds of millions over the years as EIFF and EMRF repeatedly bought Adani stock low and sold it high.
READ MORE
THE ADANI FILES
Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History
Market Abuse and Insider Trading: Transactions with the Use of Insider Information and Fines for Market Manipulation
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