The conglomerate was charged in the Hindenburg Report, among other things, with brazen stock manipulation and accounting fraud, which severely undermined investor confidence and caused the share price to collapse.
The investigation claimed that the Adani family took involved in creating offshore shell companies to forge foreign exchange transactions for inflated turnover and money siphoning. A close relative, Vinod Adani, was charged with running a network of offshore shell companies to enable fraud through family members. These offshore shells also made up a significant portion of the public shareholding, which Indian securities rules require to be at least 25% of the entire shareholding.
Source: Business Today
By identifying two of these close associates as Nasser Ali Shaban Ahli and Chang Chung-Ling, the OCCRP partially closes the loop. The study traces the family members of Adani who have done business with Ahli and Chang in the past and who have also served as directors and shareholders of some of its group firms.
The ability to access data about international organizations is a significant problem as well. According to the expert committee’s report, the Securities and Exchange Board of India (Sebi) has been keeping a few of the foreign investors in the Adani Group under surveillance since October 2020 in order to make sure that the group’s public shareholding is actually public. However, it encountered a significant obstacle when it was unable to identify the UBO of these businesses.
It is crucial that a partnership between Sebi and its colleagues in other nations be developed through government action given the current global economic environment where borders of countries are essentially becoming irrelevant for investments. These regulators should be able to cooperate with one another in situations where they need information on entities that foreign regulators are unable to track.
Additionally, the scope of this collaboration ought to permit Sebi’s counterpart to open an investigation into a business under its control based on a Sebi recommendation. If such a deal can be reached, it would be a huge step in the right direction to stop scams committed by businesses employing anonymous offshore organizations.
Source: NDTV
It would be ideal for Sebi to expand its investigation into the matter, even if it means delaying the release of the investigation’s report, which is scheduled to be published next month, given that the OCCRP investigation has revealed names of those involved and evidence of a few communications that suggests a connection between their interested entities and the Adani family.
Creating a channel for Sebi to contact its Mauritian counterpart, the Financial Services Commission, is urgently needed. The current Memorandum of Understanding (MoU) between these nations does not appear to be strong enough to unearth reliable information about Mauritian entities; as a result, a stronger mechanism to yield information of any kind in times of crisis is required. When the Indian government is committed to growing foreign investment in India, a balance should be introduced by, among other things, guaranteeing the availability of information on the source of funds being brought in.
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