The Gautam Adani group has issued a strongly-worded rebuttal to the UK-based Financial Times’ report, which said that almost half of all foreign direct investment into the Adani Group came from connected offshore entities. Adani Group said that the conglomerate is not obscuring promoter ownership and financing. The company said that the report by Financial Times is “a mendacious, deliberate effort to attempt to paint the Adani family and the Adani Group in the worst possible light”.
Earlier last month, the Financial Times published a report saying that the offshore companies linked to the Adanis invested at least $2.6 billion in the group during 2017-2022, which was 45.4 per cent of the $5.7 billion it received in total FDI in the period. Adani Group, in its email to the Financial Times, said, “We are fully compliant with securities laws and are not obscuring promoter ownership and financing.” Further, Adani Group asked the story be immediately removed from the website.
Adani Group said that the report incorrectly mixed primary and secondary investments and also “ignored entirely a secondary transaction of $2 billion” in order to create “an illusion of a $2 billion gap in funding to support their pre-conceived thesis of supposed round-tripping”.
The Financial Times had said in its report that “the full extent of money flows from connected offshore entities into Adani Group is likely to be even higher given FDI data only captures a portion of overseas investment.” It added: “A quarter of the FDI flows into Adani group of companies came from connected shell companies through a series of small and frequent investments. More recently the transactions have become larger and less recurrent.”
To this, Adani Group said that the Adani Group’s promoters raised $2 billion through the sale of a 20 per cent stake in Adani Green Energy Ltd (AGEL) to TotalEnergies of France, and that this fact was “ignored completely in the 22 March 2023 story” even when FT had “contemporaneously reported” as the information was disclosed publicly on 18 Jan 2021 and 23 Jan 2021. It added: “Further, in Oct 2019, the promoters had raised USD ~700 Mn through the sale of a 37.4 per cent stake in Adani Total Gas Ltd, a fact published in an Adani press release. Again, the Financial Times chose to ignore this fact in its report, although it did publish the news at that time.”
These funds were reinvested by promoter entities to support the growth of new business and in portfolio companies such as Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd, Adani Transmission Ltd and Adani Power Ltd, Adani Group said in the statement. Adani Group has been under the public scrutiny ever since Hindenburg Research released a short selling report on Adani Group in January, accusing it of improper use of offshore tax havens and stock manipulation, allegations the group has denied. The ports-to-power conglomerate lost $120 billion in market value since the report.