No breach of law by entities being linked to Adani Group: Mauritius

Its market regulator yet to share prelim report with India

In its preliminary investigation, the securities market regulator of Mauritius has not found any breach of law by the 38 global companies and 11 funds being associated with Adani Group after the Hindenburg report disclosures,  Financial Services Commission (FSC) Chief Executive Dhanesswurnath Vikash Thakoor told Business Standard.
 
Listed Adani Group companies have lost more than $100 billion in market value since US short-seller Hindenburg made a slew of allegations against the conglomerate. Adani has denied these allegations. The FSC chief’s remarks come at a time when the Supreme Court, hearing petitions related to large investor losses, has asked the government and the Securities and Exchange Board of India (Sebi) to give their responses by Monday.
 
“We have carried out our initial assessment of all the entities related to that (Adani) group in Mauritius and, up to now, based on the information submitted, we have not found any non-compliance with our rules,” he said.
 
Though the FSC is collaborating with Sebi and regularly exchanging information, the preliminary report has not yet been shared with the Indian regulator. “This is our internal report. Sebi requests specific information from time to time, for which we need to go on site and submit the report. That’s a separate channel which continues,” Thakoor said.
 
Whenever there are media reports, it triggers certain investigations, the FSC chief said. “We request our management companies to submit compliance reports.”
 
Based on the submissions we have received so far with respect to what they are supposed to do, we have not found any breach of law, notwithstanding the fact that a number of these entities were also subjected to our routine onsite inspection according to our cycle. There has not been any breach of the anti-money laundering/combating the financing of terrorism (AML/CFT) law,” he said.
 
Mahen Kumar Seeruttun, minister of financial services and good governance of Mauritius, said the regulators of the two countries always exchange information, not just for Adani Group. “As and when a request comes to the FSC, it provides the information since it has a memorandum of understanding (MoU) to share such information,” he said.
 
Asked why Mauritius was not making automatic disclosure in this case since investments by entities from the country had come under public scrutiny, Thakoor said automatic disclosure of information would not stop people from bashing Mauritius at the international level.
 
“Automatic disclosures can’t be done simply because you won’t like your account information being published if you have one in Mauritius. The allegations, the way they have been made, don’t give us material to go straightaway (into investigation). Otherwise, it would be a fishing expedition and you have to go after all of them,” he said.
 
Reuters had on Thursday reported that Sebi was investigating links between Adani Group and at least two Mauritius-based firms — Great International Tusker Fund and Ayushmat — which participated as anchor investors in the now aborted $2.5-billion share sale.
 
On why Mauritius authorities could not confirm or deny the alleged association of the two firms with Adani Group, Thakoor said: “Going on the presumption of innocence until (it’s a) competent authority which has made allegations, we normally do not disclose.”
 
Finance Minister Nirmala Sitharaman on Saturday said Indian regulators were experienced and were seized of the Adani-Hindenburg matter. She, however, declined to disclose what the government’s response would be to the apex court’s suggestion of constituting an expert committee on the issue of heavy losses incurred by small investors after the meltdown of Adani Group stocks.