New Delhi, Aug 31 (EFE).- In a “brazen stock manipulation,” close family associates of a powerful Indian business group have invested hundreds of millions of dollars in publicly traded Adani shares, a probe by a network of investigative journalists has found.
The report by the Organized Crime and Corruption Reporting Project claimed to have discovered that “opaque investment funds” were used through offshore structures to obscure the involvement of alleged business partners of the Adani family – widely perceived to be close to Prime Minister Narendra Modi.
“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 OCCRP report said.
It came months after US-based short-seller Hindenburg Research accused the business group, led by Gautam Adani, one of the richest men in the world, of massive corporate fraud, improper business deals, and stock manipulation.
The Hindenburg report led to the group losing more than $90 billion in valuation even as the group denied any wrongdoing.
However, unlike Hindenburg, the new investigation identifies the alleged controversial owners of Adani stock to question the legality of the investments by Nasser Ali Shaban Ahli from the United Arab Emirates and Chang Chung-Ling from Taiwan.
The Adani Group has witnessed a staggering growth, from under $8 billion in market capitalization in September 2013 — the year before Modi became prime minister — to $260 billion last year.
The group has also won many government contracts, including agreements to operate and redevelop several Indian airports.
The OCCRP said from the outside, Emerging India Focus Fund (EIFF) and EM Resurgent Fund appear to be typical offshore investment vehicles operated on behalf of a number of wealthy investors.
However, a probe showed that the two foreign investors — Chang and Ahli — placed a large percentage of the money into these funds.
The investors used the funds “to trade large amounts of shares in four Adani companies between 2013 and 2018,” channeled through four companies and a Bermuda-based investment fund.
According to documents obtained by OCCRP, the investments resulted in significant profits, netting hundreds of millions over the years as the insiders repeatedly bought Adani stock low and sold it high.
The Adani group said it “categorically” rejected these “recycled allegations.”
An Adani spokesperson said the timing of these news reports was “suspicious, mischievous and malicious.”
“These attempts are aimed at, inter alia, generating profits by driving down our stock prices and these short sellers are under investigation by various authorities,” the spokesperson said. EFE