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Informist, Friday, Sep 13, 2024

 

MUMBAI – US-based short seller Hindenburg Research made a fresh allegation in a post on X, formerly Twitter, late Thursday of money laundering by Adani Group entities through offshore funds which invested in listed companies of the group in India and violated the minimum public shareholding rules and distorted their share prices. Hindenburg Research pointed to a news report in a financial crime newsletter published by Gotham City, which reported on Wednesday that Switzerland's Federal Criminal Court had passed an order last month in the matter.

 

The court ruling indicated that the public prosecutor's office of Geneva, Switzerland, had begun investigating suspected money laundering activities of an alleged front company of Indian conglomerate Adani Group much before Hindenburg Research made the initial accusations in January 2023, the news report said. The report said that more than $310 mln of an alleged front entity of the Adani Group was frozen in Swiss bank accounts.

 

As per information in the court's ruling, Swiss prosecuting authorities had seized, till further orders, five bank accounts of the alleged front entity of the Adani Group between Dec 28, 2021, and Nov 17, 2023, having aggregate funds of around $311 mln, of which $207 mln were from two bank accounts seized on Nov 17, 2023.

 

In a media statement, the Adani Group dismissed Hindenburg's latest allegations. The group "has no involvement in any Swiss court proceedings, nor have any of our company accounts been subject to sequestration by any authority," it said. The corporate group further said that in the alleged Swiss court order, their group companies have not been mentioned, and neither has the group received any request "for clarification or information from any such authority or regulatory body". The group said its overseas holding structure was transparent, fully disclosed, and compliant.

 

The Adani Group further said that Hindenburg's allegations "are clearly preposterous, irrational, and absurd...(and) yet another orchestrated and egregious attempt by the same cohorts acting in unison to inflict irreversible damage on our group's reputation and market value."

 

As per the Swiss court order in August, linked to by Hindenburg Research in its post on X, an appeal filed by the alleged Adani Group front entity whose bank accounts were frozen, was dismissed. The entity had appealed against the seizure of its five Swiss bank accounts by the public prosecutor's office during the period from December 2021 to November 2023. The court said the appeal was unfounded and detailed its reasons in the order.

 

The appellant's case pertained to an investigation opened in December 2021 by the Geneva public prosecutor's office against an entity which it alleged was the economic beneficiary of the appellant. The probe was on suspected money-laundering and forgery of documents. The probe is focusing on suspicion that the economic beneficiary entity was a front for Adani Group and invested in the Indian listed companies of the group through opaque foreign funds, according to information in the court order.

 

Not only would this alleged link mean that the group's listed companies would not have been in compliance with the minimum 25% public shareholding norm but also led to artificial inflation of share prices of the companies, according to the prosecution. The alleged front companies have also been accused by the public prosecutor's office of directly or indirectly taking out one or more loans from banks offering as collateral assets whose values primarily depended on the share prices of the listed Adani Group companies.  End

 

US$1 = 83.93 rupees

 

Reported by Rajesh Gajra

Edited by Akul Nishant Akhoury

 

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