The Hindenburg report is damning to regulators because it shows how the SEBI in particular has constantly overlooked important details of Adani's ownership by Mauritius shell companies.
As per Indian stock regulations, if more than 75% of a company is held by insiders (promoters), the company has to be delisted from the bourses. To evade this rule, Adani has been using a opaque trial of shell companies registered in Mauritius, which in turn own shares of major Adani group companies.
Part 1: Stock Parking – Offshore Funds And Shells Tied To The Adani Group Surreptitiously Own Stock In Adani Listed Companies, Seemingly In Blatant Violation Of SEBI Exchange Rules Indian Securities Regulator SEBI’s Rules Require A Minimum Public Shareholding of 25% To Limit Insider Trading, Stock Manipulation, And Undisclosed Margin Lendin
Background: 4 of Adani’s Listed Companies Are On The Brink Of India’s Delisting Threshold Due To High Reported Promoter Ownership
Currently, 4 Adani listed companies are on the brink of India’s delisting threshold due to high disclosed promoter (insider) ownership. Adani Enterprises, Adani Transmission, Adani Power, and Adani Total Gas all report 72%+ of their shares held by insiders. Furthermore, Adani Wilmar, a new company with current insider ownership of 87.94%, must reduce its insider holdings to 75% by early 2025 to meet these requirements – a significant feat requiring the offloading of 12.94% of its current insider equity.
Adani Transmission (74.19%) Adani Enterprises (72.63%) Adani Power (74.97%) Adani Total Gas (74.80%) Adani Wilmar (87.94%)
For many Adani listed companies, a large portion of their “public” shareholders are funds based in the opaque jurisdiction of Mauritius. Importantly, funds identified in this section, which we believe should be classified as “promoter” (insider) entities, hold enough shares of Adani listed companies to put four of them well over the 75% threshold, triggering delisting.
We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades. Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities.
These issues of corruption permeate multiple layers of government. According to numerous sources we spoke with, Indian securities regulator SEBI seems more inclined to protect the perpetrators than punish them.
Now coming to NDTV takeover, one of the mauritius funds LTS investments alleged to be a shell company of Adani held a big stake in NDTV even before recent Adani's takeover bid. However, Adani has been trying to takeover NDTV for a good whole now.
A group of 5 supposedly independent investment funds have an incredibly suspicious pattern of holdings. All 5 entities were formed out of Mauritius by the same incorporator, based out of the same address, and with multiple overlapping nominee directors:
APMS Investment Fund [1,2,3] Albula Investment Fund [1] Cresta Fund Limited [1] LTS Investment Fund Limited [1,2] Lotus Global Investment Fund [1,2] All 5 funds are controlled by Monterosa Investment Holdings (“Monterosa”), per Legal Entity Identifier (LEI) data.[12]
Collectively, these funds own a massive INR 360 billion (U.S. $4.5 billion) in Adani listed companies.
Our source stressed that Mauritius-based funds were a vehicle to “cut the trails” and conceal the identity of an investor bringing cash from overseas into the Indian market.
He alleged – based on his own track-record of dealing with regulators and being investigated by them – that SEBI is aware that conglomerates like the Adani Group are using Mauritius funds to flout laws on maximum stock ownership, and that SEBI participates in the schemes due to bribes.
“I won´t say they [SEBI] put a blind eye. They know about it. They personally make their money [from bribes] and then they would like to ignore it. A blind eye is where you´re definitely not touching and not disturbing it at all. So it´s not the blind eye. The whole system is very much working hand in glove. People know about it. SEBI knows about it.”
He also said he had personal knowledge of the Monterosa-operated funds:
“Monterosa’s fund has always been used as a platform… as a chainer platform to reach into India. And Monterosa is very close to the government officials and SEBI officials…So, those people are well versed with Indian systems now.”
Monterosa’s Chairman And CEO Served As Director In 3 Companies Alongside A Fugitive Diamond Merchant Who Allegedly Stole U.S. $1 Billion Before Fleeing India
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He has served as director of Monterosa entities in India as far back as 2002. He has also previously served as a director on at least three separate Indian companies alongside Mehta, according to online company directories.
Mehta stands accused of illegally siphoning U.S. $1 billion from various Indian banks through standby letters of credit, then fleeing the country to a tax haven with no extradition treaty, per media reports.
According to local media, Mehta’s son married Vinod Adani’s daughter Krupa, indicating a close familial tie.
We asked a former Elara trader whether they thought outsiders would ever be able to acquire hard, documentary evidence that Adani family members and group promoters owned Elara (and another stock parking entity that we discussed above, Monterosa Investment Holdings). They were adamant:
“Never ever. That´s the whole beauty of the structure…” They described transactions routed through offshore funds in Mauritius as a “Chinese Wall” intended to conceal the identity of the beneficial owners. They said that the Indian regulatory authority SEBI knew the reality but had other priorities:
“The regulator knows everything, actually, to be very frank…They [SEBI] knows each and every dirt in the bag but the point is that: Who wants to clean it? That´s the main point. It’s like nobody wants to make their hand messy…”
Submitted January 26, 2023 at 04:00AM by Notalabel_4566 https://ift.tt/bD32EZU
