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Shares of the Adani group suffered significant losses on Thursday after a report by a global network of investigative journalists, the Organised Crime and Corruption Reporting Project (OCCRP), alleged that the conglomerate was involved in manipulating share prices of its companies from 2013 to 2018.
Barring ACC stock, which rose marginally by 0.47 per cent, the rest of Adani group stocks fell between 2.2 to 4.4 per cent, wiping out the conglomerate’s market capitalisation by around Rs 36,000 crore.
The revelations come more than six months after US-based short-seller, Hidenburg Research, accused the group of dubious practices, including stock price manipulation.
Adani group market capitalisation has declined by Rs 8.4 trillion since January 24 this year.
Documents released by OCCRP to two British newspapers alleged that hundreds of millions of dollars were invested in publicly traded Adani stocks through opaque investment funds based in Mauritius.
In two cases, the investors have ties to the Adani family.
Refuting all the allegations, the Adani group said these offshore entities are already part of the investigation by the Securities and Exchange Board of India (Sebi).
The expert committee appointed by the Supreme Court (SC) did not find any evidence of breach of the minimum public shareholding (MPS) requirements or manipulation of stock prices.
“We have complete faith in the due process of law and remain confident of the quality of our disclosures and corporate governance standards. In light of these facts, the timing of these news reports is suspicious, mischievous and malicious – and we reject these reports in their entirety,” the group said in a statement.
OCCRP, which is funded by George Soros and Rockefeller Brothers Fund, named Nasser Ali Shaban Ahli and Chang Chung-Ling — who allegedly have business ties with the Adani family. and served as officials and shareholders in the Adani group and firms owned by Gautam Adani’s brother Vinod Adani — as fronts used to amass shares and build large trading positions.
The reports said these two individuals spent years buying and selling Adani group stocks through offshore entities and raised questions about whether they acted on Adani group promoters’ behalf.
The company in charge of their investments paid a firm owned by Vinod Adani to advise them, the reports said.
It also questioned whether Adani group insiders used these entities to bypass India’s minimum public shareholding norms and artificially inflate share prices.
The Adani group termed the reports as yet another attempt supported by a section of the foreign media to revive the Hindenburg report.
UR Bhat, co-founder of Alphaniti Fintech, said there is nothing incremental in OCCRPs’ allegation.
“Sebi has submitted a report on most allegations against the Adani group. Whether the new reports will prompt them to start one more investigation is something one needs to see. Sebi may not be investigated beyond a point due to jurisdictional constraints. Stock volatility will continue until the group clarifies that these allegations are wrong. The onus is now on the group to clarify the matter to the satisfaction of investors,” Bhat said.
The OCCRP report comes days before a scheduled SC hearing, where Sebi is likely to present its findings of its probe against allegations made by Hindenburg Research.
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