India's Adani Group stung by fresh controversy
Gautam Adani manages the Adani Group, which is among the largest corporations in India.
India's Adani Group is encountering a recent debacle following claims in a recent report that it utilized non-transparent funds to circumvent regulations preventing the manipulation of share prices.
According to the report, the group is accused of utilizing offshore mechanisms to invest large sums of money in the publicly traded stocks of its own enterprises.
It identifies a pair of private investors who purportedly purchased and traded the stocks on behalf of the organization.
The Adani Group dismissed the accusations, deeming them to be without basis.
On Thursday, the Organized Crime and Corruption Reporting Project (OCCRP), a worldwide community of investigative journalists, released a report. The Guardian and Financial Times also published articles sourced from the same documents.
The Adani Group engages in various industries such as trading commodities, managing airports, providing utilities, operating ports, and developing renewable energy. It is headed by Gautam Adani, a billionaire who currently holds the 24th position on Forbes' list of real-time billionaires.
Many people believe that Mr Adani has a strong connection with Indian Prime Minister Narendra Modi and has faced accusations from opposing politicians that he has gained advantages from his political affiliations, claims which he firmly denies.
Earlier this year, the entrepreneur found himself embroiled in a significant controversy following allegations from Hindenburg Research, a US-based investor who specializes in short selling. Hindenburg boldly accused the entrepreneur's organization of engaging in deceptive tactics to manipulate stock prices and commit accounting fraud. Additionally, they claimed that the group utilized foreign entities and shell corporations as a means to artificially inflate the value of their own stocks.
The team refuted the accusations, labeling them as "vicious"; however, the company's stocks plummeted, resulting in a significant loss in market capitalization, and consequently, the planned sale of shares had to be abandoned. At present, an inquiry into the claims is being overseen by a committee appointed by the Supreme Court of India, with the country's market regulatory body carrying out the investigation.
According to the OCCRP report, two individuals engaged in the extensive trading of Adani Group shares, amounting to hundreds of millions of dollars over a prolonged period. The report highlights that these two individuals share a strong connection with the Adani family, serving as directors and stakeholders in various companies affiliated with the group.
The BBC has not conducted an independent assessment of the accusations.
According to OCCRP, there is no proof to suggest that the capital employed for their investments originated from the Adani household.
However, it was mentioned that the news and records examined by their reporters indicated that there is proof suggesting the "trading in Adani stock was synchronized with the family."
According to OCCRP, the legality of this agreement depends on whether the two investors can be deemed as acting on behalf of Adani 'promoters', which is a term used in India to describe the main owners of a company.
The two individuals did not respond publicly right away, but the Adani Group raised concerns about the timing of the news article, referring to it as "questionable, deceitful, and harmful."
"We maintain unwavering trust in the judicial procedures and retain a strong belief in the caliber of our disclosures and corporate governance principles," declared the statement.
Adani Enterprises, the main company of the Adani group, saw its shares decline by 2.82% on the BSE index, which is commonly used as a reference point.
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