Hindenburg Research stated that Adani family members allegedly operated offshore shell entities in tax havens such as Mauritius, UAE and the Caribbean
The report further claimed that it has identified 38 Mauritius-based shell companies that are allegedly controlled by Vinod Adani or close associates, and more that are “surreptitiously controlled” by him in Cyprus, UAE, Singapore and several Caribbean Islands. Many of these companies have no “obvious” signs of operations, Hindenburg alleged, with no reported employees, independent addresses, phone numbers of online presence. “Despite this, they have collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals,” it alleged. Vinod Adani shells, according to Hindenburg, serve a few functions including stock parking and manipulation, and money laundering “through Adani’s private companies onto the listed companies’ balance sheets in order to maintain the appearance of financial health and solvency”.
The problem with promoter inflating stock prices is that it misleads investors and artificially inflates the value of the stock, leading to potentially harmful consequences such as:
- Unsustainable prices
- Financial losses for investors
- Loss of market credibility
- Legal consequences for the promoter
- Damaged reputation for the company and its management.
Such practices can also contribute to the overall instability of the financial market and negatively impact the economy.