India’s Adani Group Faces Scrutiny After Its Secret Investors are Revealed

In partnership with the Guardian and the Financial Times, OCCRP had revealed that foreign associates of the Adanis, a wealthy Indian family closely connected to Prime Minister Narendra Modi, secretly held large stakes in the family’s business empire in possible violation of the country’s law.

Indian National Congress leader Rahul Gandhi, one of Modi's main political rivals, said at a press conference on Thursday that "at the very least, a Joint Parliamentary Committee should be formed to investigate why the two foreigners were allowed to manipulate the valuation of a company that controls almost all of India's infrastructure."

“Why is there no investigation taking place?” he asked.

Sanjay Singh, a member of the Indian parliament's upper house from the opposition Aam Aadmi Party (AAP), held a press conference with his colleague Reena Gupta, the party's national spokesperson. 

The two also highlighted the findings of the investigation, and Singh said he would write to the Enforcement Directorate, an Indian agency responsible for investigating financial crimes, as well as to SEBI, the country’s stock market regulator.

Mahua Moitra, a politician from the All India Trinamool Congress, an opposition party primarily influential in Bengal, tagged the official account of SEBI, urging the agency to "do your job!"

Months before OCCRP’s investigation was published, the New York-based short-seller Hindenberg caused a political and economic storm in India when it leveled serious charges of stock manipulation against the Adani Group, a powerful conglomerate with an extraordinary range of interests in various industries, from TV stations to airports.

One of the most crucial aspects of Hindenberg's allegations was the claim that many of the group’s ostensibly public investors were actually closely associated with the conglomerate, possibly violating Indian securities laws.

The accusations led to protests and caused Adani Group stocks to plummet. India's Supreme Court convened an expert committee to look into the matter, but the investigation was inconclusive because the government agencies it contacted couldn't verify the identities of the suspicious investors due to convoluted offshore structures.

In OCCRP’s investigation, files from multiple tax havens, bank records, and internal Adani Group emails allowed reporters to identify two of the investors as Naseer Ali Shaban Ahli from the United Arab Emirates and Chang Chung-Ling from Taiwan. OCCRP's investigation was published in collaboration with The Guardian and the Financial Times.

The two men invested hundreds of millions of dollars in publicly traded Adani stock through opaque investment funds based in the island nation of Mauritius. These investments also appear to have been coordinated with an Adani company.

Ahli and Chang’s trading in Adani Group stock is significant because both men are widely known to be closely linked to the Adani family, including appearing as shareholders and directors in affiliated companies. Indian law forbids insiders from owning more than 75 percent of a publicly listed company — a limit that their actions may have breached.

OCCRP reporters also obtained a letter that the Securities and Exchange Board of India (SEBI), the Indian regulator, received from the Directorate of Revenue Intelligence (DRI), India's premier investigative agency under the Ministry of Finance, in 2014. 

In the letter, the DRI noted that it had evidence that money from an alleged over-invoicing scheme perpetrated by Adani it was investigating had been sent to Mauritius — and was invested in Adani stock.

"The Indian market is ripe for stock manipulation. What you claim to have found is a broader indictment of the system," Professor Aswath Damodaran, who teaches corporate finance and valuation at the Stern School of Business at New York University, told OCCRP on Friday.

Damodaran blamed SEBI, arguing that the regulator should have taken action back then. 

"The SEBI are the actual culprits. The victim here is the long-term trust in the market," he said.

Damodaran explained that the Adani Group is "the most highly-priced infrastructure company in the world, and many of its actions, including its spin-offs, have no discernible economic rationale."

The veteran journalist N Ram asked on X, formerly known as Twitter, whether India’s SEBI & the Enforcement Directorate will “take cognizance of these investigative reports and investigate the fresh allegations? Or will there be an attempted cover-up, which is likely to fail? And will this new information come up before the Supreme Court of India, which is hearing the Adani-Hindenburg case?"

On Thursday, the Adani Group reiterated the denials it had already issued to OCCRP reporters in response to the allegations. However, its stocks fell into the red minutes after stock markets opened in India.