Mauritius minister debunks Hindenburg report on Adani Group

Port Louis [Mauritius], May 10 : The report by Hindenburg Research alleging the presence of Shell compes of the Ad Group in Mauritius is "false and baseless", a minister in the Mauritian government said on Wednesday.

Addressing the Mauritian Parliament, the minister said he was informed by the Financial Services Commission of the report published by Hindenburg Research over the presence of Shell compes of the Ad Group in Mauritius, UAE and the Caribbean islands.

"At the outset, I wish to inform the House that the allegations of the presence of Shell compes in Mauritius are false and baseless. According to law, Shell Compes are not allowed in Mauritius or global business compes licensed by the Financial services providers have to meet substance requirements as per section 21 of the financial service activities," he added.

According to Mauritian law, the minister said a company from overseas needs to carry out its core income-generating activities in, or from, Mauritius, as required under the Income Tax Act. Second, it should be managed and controlled from Mauritius and be administered by a management company.

Fourth, it must have at least 2 directors, who are natives of Mauritius and are of sufficient calibre to exercise independence of mind and judgement; maintains, at all times, its principal bank account in Mauritius; keeps and maintains, at all times, its accounting records at its registered office in Mauritius; prepares its statutory financial statements and causes such financial statements to be audited in Mauritius; and provides for meetings of directors to include at least 2 directors from Mauritius, he added.

Hindenburg Research had, on January 24, published a report accusing the Ad Group of accounting fraud and stock mpulation over decades that had led to a nearly USD 51 billion sell-off in shares of the port-to-energy Indian conglomerate.

The US-based short seller noted that the core allegations of its report "focused on numerous suspect transactions with offshore entities were left completely unaddressed."

Hindenburg said, "We asked about the source of the billions of US dollars that have flowed from Vinod Ad-Associated Offshore shell entities through the Ad Group."

The Ad Group said the report was driven by "an ulterior motive" to "create a false market" to allow the US firm to make financial gains. It accused the Hindenburg Research report as a "malicious combination of selective misinformation and stale, baseless and discredited allegations".