August 31, 2023
Introduction
In a recent turn of events, the Adani Group has vehemently denied allegations of hidden foreign investors and insider trading as presented in a report by the Organised Crime and Corruption Reporting Project (OCCRP). The conglomerate has labeled these claims as “recycled allegations” and asserted that they hold no merit.
The OCCRP report, funded by George Soros, alleged that insider trading occurred through the involvement of two foreign investors. However, the Adani Group was quick to respond, stating, “We categorically reject these recycled allegations.” The group contended that these claims are part of a larger effort to revive what they referred to as the “meritless Hindenburg report.”
The conglomerate clarified that the allegations were based on past cases from a decade ago when the Directorate of Revenue Intelligence (DRI) investigated accusations of over-invoicing, funds transfer abroad, related party transactions, and investments through Foreign Portfolio Investors (FPIs). According to the Adani Group, an independent adjudicating authority and an appellate tribunal had both confirmed that the transactions were in accordance with the law and that there was no over-valuation. The matter reached its conclusion in March 2023 when the Supreme Court of India ruled in favor of the Adani Group.
SEBI’s ongoing investigation
Regarding the ongoing investigation by the Securities and Exchange Board of India (SEBI) into these FPIs, the Adani Group pointed out that the Expert Committee appointed by the Supreme Court had found no evidence of breach of Minimum Public Shareholding (MPS) requirements or manipulation of stock prices.
The conglomerate expressed disappointment in media outlets that did not fully carry their response and accused certain entities of attempting to profit by driving down the group’s stock prices. The Adani Group emphasized the importance of respecting the regulatory process, as both the Supreme Court and SEBI are overseeing the matter.
Stressing their confidence in the due process of law, the Adani Group reiterated their commitment to corporate governance standards and the accuracy of their disclosures. The group found the timing of the news reports suspicious, particularly as they coincided with ongoing regulatory oversight.
The statement concluded by highlighting that the Central Bureau of Investigation (CBI) had previously investigated allegations of over-evaluation and over-invoicing of power transmission equipment, closing the case in July 2015. Additionally, the Enforcement Directorate had identified 18 companies, including foreign portfolio investors and foreign institutional investors, as top beneficiaries of short selling in Adani Group shares following the Hindenburg report that triggered a market crash in January.
Conclusion
As the Enforcement Directorate shares its findings with SEBI, there are indications that probe agencies may consider investigating potential money laundering and other allegations against the implicated companies. The Adani Group remains steadfast in its stance, rejecting the OCCRP report and maintaining faith in the regulatory process.
