Adanis under fire: SEBI knew of stock scam in Adani Group?

The Financial Times and The Guardian on Thursday, 31 August, revealed fresh evidence that indicates close aides and associates of Vinod Adani, brother of group chairperson Gautam Adani, had secretly bought Adani shares.

The Adani Group had denied until March this year that Vinod had an active role. On paper, the investment in question appears to be from the 'public', but was used by the Group to manipulate stock prices.

The investigation identifies, for the first time, Chang Chung-Ling from Taiwan and Nasser Ali Shaban Ahli from the United Arab Emirates, as associates of Vinod Adani. It also shows their investments were ‘overseen by a Vinod Adani employee, raising questions whether they were front men used to bypass rules for Indian companies'.

The investigation also unearthed correspondence between the then director of revenue intelligence (DRI) and the then SEBI chief that indicates that SEBI was investigating the dealings of the Adani Group in the stock market in 2014.

The SEBI, however, has claimed before the Supreme Court that allegations that it had been investigating into the stock market dealings of the Adani Group since 2016 were ‘baseless’. It has claimed that it first looked into the allegations in 2020.

But the documents with OCCRP show that 'two separate investigations into Adani were underway in January 2014, according to previously unreported Indian government correspondence between SEBI and the (DRI), which polices smuggling and economic crime'.

'The head of the DRI wrote to his counterpart at the regulator because SEBI was investigating “the dealings of the Adani Group of companies in the stock market.” His letter was accompanied by a CD of evidence from a DRI probe into alleged inflated invoices at Adani power projects, and said “there are indications that a part of the siphoned off money may have found its way to stock markets in India as investment and disinvestment in [the] Adani Group",' the report says.

American short-selling firm Hindenburg Research in January 2023 published a report that accused the Adani Group of running the 'largest con in corporate history'.

The Adani Group had described it then as an attack on India and its regulators. The Group has consistently denied wrongdoings and claimed that its dealings have been in compliance with Indian rules and regulations.

The OCCRP investigation, reported extensively today by the two London newspapers, reveals:

• Two men who spent years trading hundreds of millions of dollars’ worth of Adani Group stock: Nasser Ali Shaban Ahli and Chang Chung-Ling

• Both have close ties to the Adani family, including as directors and shareholders in affiliated companies

• Investment funds they used to trade in Adani Group stock received instructions from a company controlled by a senior member of the Adani family

The full report may be read here.