Ports-to-telecoms conglomerate Adani Group is chaired by its billionaire founder Gautam Adani, one of Asia’s richest men. © Reuters
BENGALURU — A Swiss court has frozen $311 million from a company that allegedly laundered money for India’s Adani Group through offshore funds in Mauritius and Bermuda — claims that the ports-to-telecom conglomerate has blasted as “absurd.”
A 12-page ruling by the Federal Criminal Court showed that prosecutors froze the assets of a company identified as A.Ltd as part of an investigation into its owner that began in December 2021, more than a year before U.S.-based short seller Hindenburg Research alleged that Adani had engaged in “brazen stock market manipulation”.
The allegations triggered wild selling of the group’s shares and shaved $145 billion off its market value.
The Swiss prosecutors suspect that the person under investigation was not the “real beneficial owner” of the investment company, but rather a front man for a business group that engaged in money laundering and embezzlement, according to the Aug. 7 ruling. This person allegedly received “significant sums” from the group and invested them in such funds that were “in reality ultimately overseen” by the group or its directors. Those funds subsequently bought into the companies owned by the group that helped in artificially inflating the value of the shares, which were put up as collateral for loans.
“These assets put up as collateral would thus be knowingly overvalued when granting the loans,” the ruling noted.
The court ruling, first reported by the local media on Thursday, did not name Adani group.
But it identified instances that resembled Hindenburg’s allegations against Adani, and the U.S. company on Friday posted the ruling and related media reports on social media.
The court decision referenced a report by a company based in New York, published on Jan. 24, 2023, alleging close links between the person under investigation and the “brother of the founder and chairman” of a business group.
The Hindenburg report was published on the same day last year and identified Vinod Adani, brother of Adani group’s billionaire chairman Gautam Adani, as the orchestrator of the alleged fraud. The American company pointed to instances in which offshore funds were used to buy Adani Group shares to skirt an Indian regulation that bars founders of listed companies from owning more than 75% of their companies.
Responding to the media reports, Adani on Friday called the allegations “preposterous, irrational and absurd” and said they were “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.”
“The Adani 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. “Furthermore, even in the alleged order, the Swiss court has neither mentioned our group companies, nor have we received any requests for clarification or information from any such authority or regulatory body.”
Adani did not respond to questions from Nikkei Asia about the ruling or whether it was the unidentified group referenced in the ruling against the investment company owner.
Swirling allegations of financial impropriety at Adani group are also taking a toll on India’s stock market regulator, as the country’s main opposition Congress party demands the resignation of its chairperson, Madhabi Puri Buch, for her alleged use of offshore funds linked to Vinod Adani.
Hindenburg, citing whistleblower documents, said last month that Buch and her husband were investors in Bermuda and Mauritius-based offshore funds allegedly used by Vinod Adani to launder money. The investments were sold after Buch became a director at the market watchdog.
“We think our findings raise questions that merit further investigation,” Hindenburg said at the time. “We welcome additional transparency.”
source : asia.nikkei