New Documents Reveal Adani Family Secretly Invested In Own Shares Through Proxies

The Global Opportunities Fund located in Bermuda, at first glance, appeared to be just another unremarkable investment vehicle – a broad and inconspicuous financial entity. However, beneath this façade, two individuals were utilizing the fund for a very specific purpose: accumulating and trading substantial holdings in shares of the Adani Group, one of India’s largest and most politically influential private conglomerates.

These two individuals, Nasser Ali Shaban Ahli from the United Arab Emirates and Chang Chung-Ling from Taiwan, are closely associated with Vinod Adani, the brother of the conglomerate’s founder, Gautam Adani. Their investments were being overseen by an employee of Vinod Adani, raising concerns about whether they were acting as proxies to circumvent Indian company regulations designed to prevent share price manipulation.

The intricate paper trail shielding their identities from regulators and the public has been unveiled through documents shared with the Financial Times by the Organized Crime and Corruption Reporting Project (OCCRP), a network of investigative journalists.

This revelation marks the first time that potentially controversial Adani stock owners have been identified since the American short-selling firm Hindenburg Research published a damning report in January, accusing the Adani Group of orchestrating the “largest con in corporate history.”

Hindenburg’s allegations revolved around entities controlled by associates of Vinod Adani manipulating the share prices of some of the group’s ten listed entities, sparking a firestorm that wiped more than $90 billion from the conglomerate’s market valuation. The allegations in the report were vehemently denied by the Adani Group.

In response to inquiries from the Financial Times, an Adani spokesperson reiterated that their listed entities were fully compliant with all applicable laws, while lawyers for the company that established the investment structure refuted any wrongdoing.

The newly disclosed documents identify Ahli and Chang as key players in the broader scheme outlined by Hindenburg, showcasing a series of custom-designed investment structures within the Global Opportunities Fund, exclusively utilized for trading Adani stocks.

These structures, according to insiders, involved parallel sets of financial records at the fund provider and an intricate web of companies and funds, meticulously concealing their stake in Adani stocks.

The documents reveal that as of January 2017, Ahli and Chang secretly controlled at least 13% of the free float (shares available to the public) in three of the four Adani companies listed at the time, including the flagship Adani Enterprises.

The significance of their relationship with Vinod Adani lies in his association with the “promoter group,” a legal term in India for corporate insiders whose shareholdings are not supposed to exceed 75%, as per stock market rules. Breaches of this rule can lead to delisting.

These documents also shed light on Ahli and Chang’s initial investments in Adani stocks dating back to 2013, coinciding with the group’s efforts to increase public shareholding amid regulatory enforcement of the 75% rule.

If Indian regulators were to categorize Ahli and Chang as proxies for Vinod Adani, it would imply repeated breaches of rules meant to prevent artificial inflation of share prices, potentially enabling market manipulation.

Ketan Dalal, founder of Mumbai-based advisory firm Katalyst Advisors, underscores the potential for market manipulation when the free float of a stock is significantly smaller than it appears to the public.

These documents, primarily focused on the period from 2012 to 2018, raise broader questions about the effectiveness of international regimes aimed at identifying the beneficial owners of assets.

The investment structures in question were provided by an Indian financial group now known as 360 One, which had previously faced scrutiny for structuring a Mauritian fund used to obscure the participants in a highly controversial Indian transaction involving the fraudulent German company Wirecard in 2015.

In response to these allegations, an Adani spokesperson vehemently denied any wrongdoing, categorizing them as a rehash of previously unsubstantiated claims. Lawyers for 360 One also rejected the FT’s version of events, asserting their innocence in any wrongdoing.

Chang declined to provide substantial information when asked about his involvement with Adani, while Vinod Adani and Ahli did not respond to requests for comment. The Securities and Exchange Board of India (Sebi) also remained silent on the matter.

The paper trail connecting Ahli and Chang to Vinod Adani and leading them to a Bermuda fund provided by 360 One can be traced back to Dubai in July 2009. Ahli established a company there, which, according to DRI documents, entered into a deal with a Chinese power equipment manufacturer to supply an Adani project in India.

Simultaneously, Ahli established a Mauritian shell company, eventually transferring its ownership to Chang in October 2009. In early 2010, Vinod Adani assumed control of both companies, renaming the Dubai business as Electrogen Infra and its Mauritius parent as Electrogen Infra Holdings.

Electrogen Dubai profited from acting as an intermediary between Adani and its suppliers, with the DRI alleging that while Electrogen served as a “dummy agent for invoice copying and value inflation,” the profits were genuine. Records indicate that Electrogen Dubai transferred $900 million to its parent in Mauritius between 2011 and 2013.

Electrogen Mauritius then lent $100 million to another Vinod Adani company called Assent Trade & Investment, with Vinod Adani signing documents as both the lender and borrower. Assent utilized this $100 million to invest in the Indian stock market, subscribing to shares in the Bermudian Global Opportunities Fund in 2011 and 2012. Vinod Adani’s funds were subsequently directed to a Mauritian fund known as the Asia Vision Fund, which made diversified investments in stocks beyond Adani.

The newly disclosed documents also point to Sebi’s investigations into Adani back in January 2014, indicating that Indian regulators had long suspected a conspiracy to manipulate Adani shares, contrary to a recent affidavit submitted to the Supreme Court.

These documents raise questions about the vigilance of India’s regulatory institutions, as Sebi’s inquiries from 2014 into Adani came to light nearly a decade later. Aswath Damodaran, a corporate finance and valuation expert at NYU’s Stern School of Business, believes this information would reinforce concerns about the effectiveness of India’s regulatory institutions.

Sebi’s former chairman left his post in 2017 and subsequently assumed a non-executive chairmanship at New Delhi Television (NDTV), owned by the Adani Group. Since the publication of the Hindenburg report, the connections between the government and Adani, as well as the closure of probes into the company, have been under intense scrutiny.

A Supreme Court-appointed panel earlier this year assessed whether Sebi failed to detect potential wrongdoing at Adani. In its May report, the committee acknowledged Sebi’s “longstanding suspicion” that some public shareholders were not genuine and could be fronts for the company’s promoters.

However, the suspicions were not substantiated, and the report suggested that identifying ultimate beneficial owners concealed behind layers of corporate entities would be an enormous challenge.

Sebi’s recent report to the Supreme Court indicated that its investigation into potential non-compliance with minimum public shareholding requirements was ongoing, highlighting the difficulty of identifying controlling shareholders in the 13 offshore entities under scrutiny.

While Ahli and Chang’s specific interests in Adani have been exposed, questions remain about the ownership of Adani stock within the other 11 entities. This situation underscores what one insider described as common practices among Indian offshore structures designed to bypass broad-based guidelines.

Adani’s impressive stock market following and its subsequent listing of additional companies contributed to its remarkable growth from four public companies worth $12 billion in 2017 to its peak market capitalization of $288 billion late last year, before experiencing a significant downturn.

The conglomerate’s response to allegations of impropriety has been consistent, with the group maintaining its compliance with all applicable laws and dismissing accusations as baseless.

Just this August, Adani’s logistics unit, one of India’s largest commercial ports operators and a key revenue source for Adani, suffered a fresh blow after its auditing firm, Deloitte, resigned following the Hindenburg expose. Deloitte cited concerns regarding its ability to thoroughly scrutinize transactions between companies within the Adani Group and the logistics unit as the reason for its resignation.

The move highlights the complex nature of related party transactions, which were central to a scathing report by Hindenburg Research earlier this year. The report accused Adani of employing offshore entities to manipulate earnings, sidestep potential write-downs, and artificially enhance net income.

Adani has vehemently denied these allegations.


Information for this briefing was found via Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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