NEW DELHI: In a complaint addressed to the Director of the Enforcement Directorate (ED), leaders of 18 Opposition parties demanded a thorough probe into the New York-based short seller Hindenburg Research’s report, which accused the Adani group of stock price manipulation and fraud.
The complaint to the ED was released to the media shortly after the Delhi Police stopped a march taken out by 18 Opposition parties to the agency’s headquarters to submit it.
In the letter, the leaders alleged that the Adani Group companies are accused of having established a network of offshore shell companies and offshore funds controlled by parties related to the Adani Group for the purposes of "artificially inflating stock valuations and to give a distorted picture with regard to the group companies' financial health".
“Over the last three months, several crucial pieces of evidence have been made available against the Adani Group in the public domain. Yet, the ED, which claims to pursue such cases with vigour and fairness has to launch even a preliminary inquiry into these very serious charges. We are constrained to file this official complaint so that the ED is compelled to investigate a relationship that has serious implications not just for our economy but most importantly, our democracy,” said the letter written by Mallikarjun Kharge, Leader of Opposition in Rajya Sabha.
Soon after the march began from Parliament this afternoon, the Parliamentarians were stopped by a large contingent of Police. Though many leaders tried to negotiate with the police to let them meet the ED Director in small groups, the police did not relent.
Speaking to the media, Congress leader Pramod Tiwari said that the members are returning to Parliament as they are told that the ED Director was unwilling to meet the MPs.
Calling the allegations ‘serious and far-reaching charges of corporate fraud’, the complaint said, “This case involves stock-price manipulation through fraudulent means and the misuse/monopolization of public resources to benefit a single corporate group.”
Trinamool Congress was missing from the list of signatories of the letter and its members did not attend the march.
Reminding the ED that it cannot turn around and abdicate its jurisdiction, the letter said “charges related to accounting fraud, the dubious nature of how the Follow-On Public Offer was manipulated behind the scenes, the shocking similarity with Adani’s previous actions for which they have been investigated by your predecessors, are all available in the public domain.”
“We are acutely aware of how in the recent past, the ED has also zealously pursued cases of alleged political favouritism including sharing concurrent jurisdiction with SEBI and CBI. We are also aware of the limited remit of the Supreme Court Commission appointed on the subject,” it said.
In the letter, the leaders point out that the Adani Group companies are accused of having established a network of offshore shell companies and offshore funds controlled by parties related to the Adani Group for (1) artificially inflating stock valuations and (2) to give a distorted picture about the group companies’ financial health.
“Data available in the public domain actively lists 38 Mauritius shell entities controlled by the Adani group through Vinod Adani or close associates; as well as other entities in Cyprus, the UAE, Singapore, and several Caribbean Islands. The purpose of these entities was to “round trip” money into the Adani companies for the aforementioned reasons,” it said.
The letter says that Vinod Adani, Gautam Adani’s brother, is alleged to have played a key part in setting up networks that create a causal link between the off-shore entities and Adani’s Indian companies.
“These actions are also patently illegal since they violate the basic rule that at least 25% of free float be held by non-promoter entities,” the letter said, adding, “It is surprising that despite all of the above, the ED has shown little to no interest in pursuing a basic investigation into the entities’ affairs,”.
The letter also listed several other allegations against the group, which were available in the public domain, said the leaders.