'Related or unrelated parties?': TMC's Mahua Moitra asks Sebi, ED about Adani's alleged reliance on offshore funding

Trinamool Congress MP Mahua Moitra on Wednesday asked market regulator Sebi, Enforcement Directorate, Income Tax Department if they will be investigating Hindenburg-hit Adani Group's alleged reliance on offshore funding or not. 

UK's Financial Times reported that almost half of conglomerate’s $5.7 billion in FDI over 5 years came from opaque overseas entities.

"A Financial Times analysis of India’s FDI remittance statistics shows offshore companies linked to the Adanis invested at least $2.6 billion in the group between 2017 and 2022, 45.4 per cent of the more than $5.7 billion it received in total FDI over the period," the report said. 

The biggest investments came from two companies directly or indirectly linked to Vinod Adani, Adani Group chairman Gautam Adani's elder brother, who is listed in stock exchange filings as a Cypriot national and lives in Dubai.

Emerging Market Investment DMCC, which states on its website that it only invests Vinod Adani’s funds, ploughed $631 million into Adani companies between 2017 and 2018. Meanwhile, Mauritius-registered Gardenia Trade and Investment, which invested $782 million into Adani companies between 2021 and 2022, is directed by Emerging Market’s manager Subir Mittra, the report said. 

On January 24, US short seller Hindenburg Research alleged stock manipulation and improper use of tax havens, and flagged concerns over debt levels at the company, which Adani has denied.

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The Hindenburg report said that Vinod Adani “manages a vast labyrinth of offshore shell entities” that have “collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals”.

On allegations of use of offshore entities for purposes of money laundering, it said that Hindenburg's queries make reckless statements without any evidence whatsoever and purely based on unsubstantiated speculations without any understanding of the Indian laws around related parties and related-party transactions.

Although the Adani Group, in its response to Hindenburg’s allegations, has claimed that Vinod Adani has no official role and is not a related party.

However, last week Adani Group clarified that Vinod Adani, elder brother of conglomerate's chairman Gautam Adani, is part of the "promoter group" of various listed entities within it.

"We would like to submit that Mr. Gautam Adani and Mr. Rajesh Adani are individual promoters of various listed entities within the Adani group and Mr. Vinod Adani is an immediate relative of the individual promoters. Accordingly, as per the applicable Indian regulations, Mr. Vinod Adani is part of the ‘promoter group’ of various listed entities within the Adani group. This fact has been submitted to Indian regulatory authorities from time to time in various disclosures," said Adani Group in a stock exchange filing. Adani Group was responding to a news report that said Vinod Adani is the ultimate beneficiary of Ambuja Cements Ltd and ACC Ltd.

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