OCCRP, which has cited these documents in its recent report on the Ahmedabad-based conglomerate, has refused to provide them to Sebi. OCCRP is a network of investigative reporters backed by the likes of the US Department of State, Rockefeller Brothers Fund, Ford Foundation and George Soros.
The move comes ahead of the Supreme Court hearing of the case, which is slated to come up soon.
Sebi approached the investigative journalism group after it alleged, in a report released on August 31, that the Indian conglomerate routed funds to two foreign individuals to invest in its own shares using Mauritius-based platforms. OCCRP had said it had sourced the information from multiple geographies, including Mauritius. It had alleged business partners of the Adani family made large investments in companies’ shares through “opaque” Mauritius funds.
In its submission to the Supreme Court, Sebi had said shareholders linked to certain foreign portfolio investors in Adani companies are located in tax havens, and, thus, establishing their economic interest remains a challenge.
The markets regulator added that efforts are still being made to gather details from five overseas jurisdictions.
Sources Accessible: OCCRP
“Sebi did contact OCCRP seeking key documents from our investigation. However, our long-standing policy is not to provide any documents beyond what we publish ourselves,” the investigative journalists’ grouping told ET.
OCCRP pointed out to the Indian regulator that “advocate Prashant Bhushan has access to some of the documents.” Bhushan represents one of the petitioners in the Adani-Hindenburg case before the Supreme Court.
OCCRP said, “On September 1, Bhushan tweeted one of the key documents we had relied upon that showed Sebi was warned by the DRI (Directorate of Revenue Intelligence) in 2014 about alleged stock manipulation. On September 18, a filing was done in Indian Supreme Court, where some of the other documents were attached. Clearly, Bhushan has access to at least some of the same documents we used in our story. Hence our referral.”
The January 2014 DRI alert, which was sent to former Sebi chairman UK Sinha, related to Adani allegedly siphoning off money by overvaluing power equipment imports and investing them in listed companies via entities located in Mauritius and Dubai.
OCCRP further said, “The ongoing investigation into the Adani Group is the outcome of a two-year-long investigation by a network of reporters, across many geographies. Information was sourced from many places, including multiple tax havens, bank records and internal Adani emails. All of our sources of information are accessible to Sebi through official channels.”
Sebi didn’t respond to ET’s emailed query till the time of going to press.
Adani Group has strongly denied allegations, claiming to be the victim of a smear campaign orchestrated by international outfits and short-sellers.
With regard to the DRI probe, Adani has repeatedly pointed out that the show-cause notices issued by DRI were quashed by the courts.
In a series of orders passed between July and August 2022, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the notices issued by DRI to various Adani firms. DRI’s appeals against the CESTAT orders were rejected by the Supreme Court earlier this year.
A person in the know said that several foreign jurisdictions have conveyed to Sebi that they won’t be able to share information. In view of these challenges, the regulator approached OCCRP – which has the information – to build its arguments in the Adani-Hindenburg case, the person added.
The OCCRP report in August claimed that it reviewed several internal emails of the Adani Group, apart from files from tax havens, and found at least two cases where investors used these offshore structures to buy and sell shares. The reporters’ collective also said these trades were carried out on the instructions of a senior member of the Adani family.
The allegations by the journalists’ group came after a January report by US-based short-seller Hindenburg Research, whose accusations of the conglomerate indulging in accounting malpractices, lapses in corporate governance and manipulation in stock prices triggered a crash in the group’s shares. Most group companies, though, have recovered part of their losses.