Swiss accounts with ₹2753 cr of Adani proxy frozen.
An alleged front man for the Adani Group has reportedly been investing in offshore funds based in tax havens, raising concerns about financial transparency. These funds were allegedly used exclusively for purchasing and holding Adani Group stocks, prompting further scrutiny into the nature of these investments. The accusations suggest that the individual acted as a proxy, helping to bolster the company’s stock value through indirect ownership. While these claims are under investigation, the Adani Group has denied any direct involvement, stating that they maintain no official links with the alleged front man or the offshore entities in question.
Swiss Authorities Freeze $310 Million Linked to Alleged Adani Proxy, Adani Group Denies Involvement
Switzerland’s financial watchdogs have frozen funds worth USD 310 million (approximately Rs 2,573 crore) spread across various Swiss bank accounts allegedly connected to the Adani Group, as part of an ongoing investigation into accusations of money laundering and security forgery. The move is seen as a significant step in the international scrutiny of the Indian conglomerate, which has been under the lens for its financial practices.
Ongoing Investigation in Switzerland
The accounts were frozen by Switzerland’s Federal Criminal Court as part of an investigation that has been in progress since 2021. US-based short seller Hindenburg Research recently brought the matter into the spotlight, revealing that Switzerland’s public ministry of Geneva has been investigating these accounts for over two years. This investigation, which reportedly targets five bank accounts linked to an alleged “straw man” for the Adani Group, began long before Hindenburg’s own accusations were made public in 2023.
According to Swiss authorities, the frozen accounts are allegedly connected to a front man working on behalf of the Adani Group. Prosecutors claim that the funds in these accounts were invested in offshore entities based in tax havens, such as the British Virgin Islands, Mauritius, and Bermuda. These funds were allegedly used exclusively to purchase and hold stocks in companies under the Adani conglomerate, raising concerns about financial transparency and possible stock price manipulation.
Hindenburg Research’s Role
Hindenburg Research, a US-based short seller known for exposing financial irregularities, has been a key player in bringing the allegations against Adani Group to public attention. The firm took to social media to highlight Switzerland’s investigation, emphasizing that it began well before their own critical report on Adani in 2023. The Hindenburg report accused the Adani Group of various financial malpractices, including accounting fraud and stock manipulation, leading to a massive sell-off of the conglomerate’s listed firms, wiping away USD 150 billion in market value over the following weeks.
Hindenburg’s revelations in 2023 painted a picture of complex financial arrangements within the Adani Group, suggesting that shell companies and offshore entities were used to inflate the stock prices of the group’s publicly traded firms. The report alleged that a network of offshore firms with ties to Vinod Adani, the elder brother of Adani Group’s founder Gautam Adani, was involved in stock manipulation activities. Hindenburg’s public disclosure prompted global investors to reevaluate their stakes in Adani companies, leading to a sharp drop in market capitalization.
Swiss Court’s Findings
Swiss prosecutors investigating the case have indicated that the funds frozen in the bank accounts were part of an elaborate financial network linked to the Adani Group. The alleged front man, according to the prosecutors, had been using offshore accounts in notorious tax havens to make significant investments in Adani stocks. These funds were reportedly channeled through tax havens like the British Virgin Islands, Mauritius, and Bermuda, raising suspicions about the legality of the transactions and potential violations of international financial regulations.
The Swiss authorities’ actions are seen as part of a broader global effort to scrutinize corporate malpractices and illicit financial flows, especially involving high-profile conglomerates. Although the investigation has not yet established direct links to the core leadership of the Adani Group, the involvement of a purported proxy raises questions about the group’s financial operations and governance.
Adani Group’s Response
The Adani Group has vehemently denied any involvement with the frozen bank accounts or the Swiss court proceedings. In a statement issued following the reports, the conglomerate declared, “We unequivocally reject and deny the baseless allegations presented.
The company further asserted that it operates with full compliance with the law and maintains transparency in its business dealings. It also emphasized that no connection exists between the group and the alleged front man whose accounts have been frozen. The Adani Group has consistently denied any wrongdoing in relation to the accusations brought forth by Hindenburg Research and has challenged the legitimacy of the short seller’s claims.
Implications of the Investigation
The ongoing investigation into the Adani Group’s financial practices, particularly the freezing of accounts in Switzerland, has added further fuel to the controversy surrounding the conglomerate. Hindenburg’s initial report led to significant financial repercussions for the group, and the latest developments suggest that international scrutiny of Adani’s financial activities is far from over.
Furthermore, Hindenburg Research has also accused the Securities and Exchange Board of India (SEBI) chief Madhabi Puri Buch of having dubious financial connections and a potential conflict of interest with the Adani Group. These allegations have added another layer of complexity to the situation, implicating India’s financial regulatory bodies in the ongoing saga.
Despite the Adani Group’s denial of any links to the Swiss investigation, the freezing of funds and the accusations of offshore investments in tax havens raise serious concerns about the transparency of its financial dealings. As global authorities continue to scrutinize the group’s operations, the coming months could see further revelations and potentially more legal challenges for the conglomerate.
For now, the Adani Group remains under the microscope, with global investors, regulators, and financial watchdogs paying close attention to the outcome of this investigation and any future developments in the case.