Probe Adani, you cannot turn around and abdicate jurisdiction: Oppn to ED

“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 yet to launch even a preliminary inquiry into these very serious charges.

“As a result, 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, for our democracy. This case involves serious and far-reaching charges of corporate fraud, political corruption, stock-price manipulation through fraudulent means and the misuse/monopolisation of public resources to benefit a single corporate group,” the complaint by Opposition leaders reads.

Among the signatories of the complaint are Leader of the Opposition in the Rajya Sabha Mallikarjun Kharge of the Congress, Binoy Viswam of the CPI, T R Baalu of the DMK, Elamaram Kareem of the CPI(M), Ramgopal Yadav of the Samajwadi Party (SP), Sanjay Singh of the Aam Aadmi Party (AAP), Sanjay Raut of the Shiv Sena (Uddhav Balasaheb Thackeray), K Keshava Rao of the Bharat Rashtra Samithi (BRS) and Mahua Maji of the Jharkhand Mukti Morcha (JMM).

The complaint says, “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.”

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.”

The complaint to the ED goes on to add, “What makes matters worse and establishes a clear causal link between these off-shore entities and Adani’s Indian companies, is that Gautam Adani’s brother Vinod Adani, along with his associates, is alleged to be the person crucial to setting up these networks.”

The complaint letter says, “In other words, parent companies are not at “arms- length” from these transactions, but have actively created them for the aforementioned purposes. The detailed nature of transactions, which reveal such a link, is now available in the public domain. 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 Opposition leaders alleged in the letter that the “Adani Group companies lent significant amounts of money to a company known as AdiCorp, whose financials did not support the lending of such a large amount and then that company allegedly funnelled the vast majority of the loaned amount to Adani Power”, and argued that “this transaction alone merits serious scrutiny and explicit details of the transactions are available in the public domain”.

“Furthermore, this is just one select example to highlight the brazenness with which the group in question operates. We have several such examples, all taken from data available in the public domain, that we can share with the ED in case it finds itself unable to do so,” the complaint reads, adding there also hasn’t been any investigation into the seizure of 3,000 kg of drugs in a shipment at Mundra Port in September 2021. Mundra Port is owned and operated by the Adani Group.

“While arrests have been made, there has been absolutely no investigation into the security lapses at the port, which allowed such a serious crime to take place. Furthermore, there has been absolutely no serious investigation into the company charged with running the port on whose watch this grave crime occurred. Given the cross-border implications, it is even more surprising that the jurisdiction of the ED was never invoked in the investigation,” it says.

Levelling charges of cronyism, the Opposition complaint reads, “The Adani Group companies have repeatedly exercised improper influence to obtain concessions and contracts from governments and regulated entities which they are unqualified for.” It cites three specific cases, including the Dharavi redevelopment project and the alteration of a power supply contract in Jharkhand.

“Once again, these are just a few of the allegations, all borne out from data available in the public domain. Charges related to accounting fraud, the dubious nature of how the Follow-On Public Offer were 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. Furthermore, considering the massive amounts of debt that the Adani Group has taken on from various public sector banks, the above select examples allege a clear pattern of corruption, cronyism and habitual law-breaking. 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.

“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 the SEBI and the CBI. We are also aware of the limited remit of the Supreme Court Commission appointed on the subject. We point this out so as to remind the ED that it cannot turn around and abdicate its jurisdiction on these or other grounds. In light of the above, we the members of the Opposition, ask that you take immediate action on the abovementioned allegations.”