Adani-Hindenburg row: Mauritian minister rejects shell company allegations

• Mauritian finance minister Mahen Kumar Seeruttun called Hindenburg’s allegations of Adani’s shell companies based in Mauritius as “false” and “baseless”.
  
• In January, Hindenburg Research said it identified 38 shell entities based out of Mauritius, controlled by Gautam Adani’s brother Vinod Adani.
  
• This comes just ahead of the Supreme Court beginning the hearing of pleas in the Adani-Hindenburg row on May 12.
  
• The Adani group is looking to raise funds in three of its entities, namely Adani Enterprises, Adani Green Energy, and Adani Ports & SEZ.
  

Mauritian finance minister Mahen Kumar Seeruttun rejected the allegations of Hindenburg Research, which said that the Adani group has a web of shell entities based in Mauritius. Seeruttun called the allegations “false” and “baseless”.

"At the outset, I wish to inform the House that the allegations of the presence of shell companies in Mauritius are false and baseless. According to law, shell companies are not allowed in Mauritius or global business companies licensed by the financial services providers have to meet substance requirements as per Section 21 of the financial service activities," Seeruttun said.

He added that according Mauritian laws, an overseas company needs to carry out income generating activities in or from Mauritius, and that it needs to be managed and controlled by the country and be administered by a management company.

This comes just ahead of the Supreme Court beginning the hearing of pleas in the Adani-Hindenburg row on May 12.

In January, Hindenburg Research alleged that the “Adani Group has engaged in billions of US dollars in suspicious dealings with its chairman’s brother, Vinod Adani, and his labyrinth of offshore shell entities.”

In response, Adani Group had said, “We are neither aware nor required to be aware of their ‘source of funds’.”

In its reaction, Hindenburg Research also outlined two examples of conflict of interest – the first one of a $253 million loan from a Mauritius entity where Vinod Adani is a director, and the second one of a $692.5 million investment from another Mauritius entity that is controlled by the head of the Adani Group’s private family investment office.

All in all, the firm said it has identified 38 shell entities based out of Mauritius, controlled by Vinod Adani or other close associates of the Adani Group, in an investigation it conducted over the course of two years.

Since the Hindenburg report was released in January, the Adani group’s cumulative market capitalisation has fallen by 49% to ₹11.2 lakh crore.

However, news of the group flagship Adani Enterprises looking to raise funds up to $2.5 billion resulted in a positive sentiment in the group stocks on Thursday – all the 10 group stocks witnessed a rally today, with the combined market capitalisation rising by over ₹30,000 crore.


Source: NSE, as on May 11, 2023

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