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    Two FPIs linked to Adani Group acted as fronts for promoters, says OCCRP

    Synopsis

    In its report, the Organized Crime and Corruption Reporting Project (OCCRP) alleged that two overseas funds, or foreign portfolio investors (FPIs), that invested extensively in Adani stocks during 2013-18 acted as "fronts" for the group's promoters.

    Adani-Hindenburg saga
    The Mauritius company then loaned the money to another Vinod Adani company, Assent Trade & Investment Pvt Ltd, "to invest in the Asian equity market," the collective's report said.
    Mumbai: OCCRP, a global collective of investigative journalists backed by billionaire George Soros and others, on Thursday said it has uncovered a trail of financial transactions to show that Adani Group promoters indulged in share price manipulation of at least four group company stocks via undisclosed related entities.

    In its report, the Organized Crime and Corruption Reporting Project (OCCRP) alleged that two overseas funds, or foreign portfolio investors (FPIs), that invested extensively in Adani stocks during 2013-18 acted as "fronts" for the group's promoters.
    fpi122

    Recycled Allegations: Adani
    OCCRP also said they were managed by individuals who are former associates of Adani Group.

    "Nasser Ali Shaban Ahli from Taiwan and Chang Chung-Ling from the United Arab Emirates, both with longstanding business ties to the Adani family, who have also served as directors and shareholders in Adani Group companies and related Vinod Adani-associated firms, used the funds to trade large amounts of shares in four Adani companies between 2013 and 2018," the collective's report said.

    "In March 2017, the value of these investments in Adani Group stock was $430 million. Additionally, in June 2016, these two investors, known as Emerging India Focus Fund and EM Resurgent Fund, held free-floating shares of four group companies - Adani Power, Adani Enterprises, Adani Ports & SEZ and Adani Transmission - ranging from 8% to nearly 14%," the report said.

    OCCRP said the four companies used in the investments were Chang-owned Lingo Investment Ltd, Ahli-owned Gulf Arij Trading FZE, Mid East Ocean Trade (Mauritius), of which Ahli was the beneficial owner, and Gulf Asia Trade & Investment Ltd, of which Ahli was the "controlling person."

    The collective's backers include the Open Society Foundations of Soros, the Ford Foundation, Rockefeller Brothers Fund and Oak Foundation, among others.

    FPIs Part of Sebi Probe: Adani
    Dismissing the report as recycled allegations, Adani Group on Thursday said there is no evidence to suggest that funds managed by Chang and Ahli have received any investments from the Adani family.

    "We categorically reject these recycled allegations. These news reports appear to be yet another concerted effort by (George) Soros-funded interests, supported by sections of the foreign media, to resurrect the meritless Hindenburg report. Notably, these FPIs are already part of the investigation by the Securities and Exchange Board of India (Sebi). As per the expert committee appointed by the Supreme Court, there is no evidence of any breach of the minimum public shareholding (MPS) requirements, or manipulation of stock prices," Adani said in a statement on Thursday.

    On Thursday, nine of the 10 listed Adani companies ended in the red on the indices, falling up to 4% after all scrips trended lower initially.

    To be sure, both funds mentioned in the OCCRP report were also named as related entities by US-based shortseller Hindenburg Research in January. The Hindenburg report had cited four offshore entities, including the EM Resurgent Fund and Emergent India Focus Fund as related entities that were, as per the shortseller, used to artificially inflate the volume and price of some listed Adani companies.

    Citing a previous Directorate of Revenue Intelligence (DRI) investigation, OCCRP alleged that funds were illegally transferred by Adani entities by overpaying its own foreign subsidiary, a UAE-based company called Electrogen Infra FZE, which then forwarded the resulting proceeds of about $1 billion to a Mauritius-based holding company, Electrogen Infra Holding Pvt Ltd, of which the ultimate beneficiary was Vinod Adani.

    The Mauritius company then loaned the money to another Vinod Adani company, Assent Trade & Investment Pvt Ltd, "to invest in the Asian equity market," the collective's report said.

    The Supreme Court in March dismissed a petition filed by DRI, challenging the orders issued last year by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), quashing cases pertaining to over-invoicing allegations levelled by DRI against three Adani companies.

    "These attempts are aimed at, inter alia, generating profits by driving down our stock prices, and these shortsellers are under investigation by various authorities," Adani Group said in a statement.




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    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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