Shares of Adani Group’s listed companies slumped on Thursday morning after a new investigative report revealed close links between the company’s offshore investors and the family members of the Indian conglomerate’s billionaire founder Gautam Adani, months after the group faced allegations of engaging in “brazen stock manipulation.”
According to the report, the investments made into the Adani stocks through a complex chain of offshore funds were primarily carried out by Nasser Ali Shaban Ahli from the United Arab Emirates and Chang Chung-Ling from Taiwan.
The report notes that Ahli and Chang have long had close ties with the Adani family—including serving as directors in Adani Group companies and firms linked to Vinod Adani, Gautam’s older brother.
In January 2017, both Ahli and Chang controlled around 13 to 14% of the publicly available shares in three Adani group companies, including the flagship Adani Enterprises, the FT report added, citing the documents.
Under Indian law, a publicly traded company’s promoters can hold no more than 75% of the company’s shares, which means if Ahli and Chang acted at Adani’s behest, the company may have violated the securities law.
After the publication of the report, Adani Enterprises shares fell more than 3% to $29 (Rs 2,400), before making a slight recovery to $29.6 (Rs 2,450), while the Adani Group’s other listed firms were also down between 2% and 3% at noon in India.
Thursday’s selloff has caused Adani’s fortune to fall by $1.8 billion, and according to our estimates, his current net worth stands at $53.6 billion—making him the world’s 24th richest person. In January, before the publication of a damning report by Hindenburg Research, which accused Adani of engaging in the “largest con in corporate history,” Adani was the world’s third richest person with a net worth higher than $126 billion.
In a statement shared with the press, the Adani Group rejected the allegations raised by the report saying: “These claims are based on closed cases from a decade ago…An independent adjudicating authority and an appellate tribunal had both confirmed that there was no over-valuation and that the transactions were in accordance with applicable law.”
Earlier this year, New York-based activist investor Hindenburg Research published a report accusing the conglomerate of engaging in “brazen stock manipulation and accounting fraud scheme over the course of decades” and disclosed a short position against group’s listed firms. The company and its billionaire founder vociferously denied the allegations and tried to paint it as an foreign attack on India and its economy. The controversy also triggered massive furor in the Indian Parliament, due to Adani’s decades old ties with Indian Prime Minister Narendra Modi.
Hindenburg Research reacted to the release of the report by tweeting: “Finally, the loop is closed,” and adding that the report shows “3% of the free float in multiple Adani stocks were secretly controlled by associates of Vinod Adani.”
Modi-linked Adani family secretly invested in own shares, documents suggest (The Guardian)
Secret paper trail reveals hidden Adani investors (Financial Times)
Documents Provide Fresh Insight Into Allegations of Stock Manipulation That Rocked India’s Powerful Adani Group (OCCRP)