Gautam Adani, one of India’s most powerful and influential billionaires, has been at the center of a mounting controversy involving alleged stock parking, offshore funds, and opaque shareholding patterns.
According to multiple reports, the Adani Group has allegedly used a strategy to manipulate its stock prices by surreptitiously owning shares in its own companies through offshore entities, primarily based in Mauritius and other tax havens. If proven true, this practice could represent one of the largest financial heists in modern times.
Stock Parking and SEBI Regulations
The key to understanding the alleged scheme lies in the practice of stock parking—the process of using offshore funds or shell companies to control shares in a listed company without direct disclosure.
The Securities and Exchange Board of India (SEBI), the country’s regulatory body, mandates a minimum public shareholding of 25% in all publicly listed companies. This rule is intended to:
- Prevent insider trading
- Reduce stock manipulation
- Minimize volatility
- Increase market liquidity
In India, promoter holdings (known as insider holdings globally) must be disclosed in compliance with SEBI’s rules.
Also Read: Raila Odinga’s Support for the Adani Deal
These rules are designed to ensure that no more than 75% of a company’s shares are controlled by insiders, which promotes transparency and prevents monopolization of shares by corporate insiders.
Table 1: SEBI’s Promoter Shareholding Rules
| Objective | Regulation |
|---|---|
| Minimum Public Float | At least 25% of shares must be publicly held |
| Disclosure of Promoter Holdings | All insider holdings must be declared |
| Promoter Pledging Transparency | Insiders must disclose whether shares are pledged |
| Prevent Insider Trading & Manipulation | Maintain fair, transparent market practices |
Adani Group’s Alleged Violations
According to reports, offshore funds tied to the Adani Group are being used to surreptitiously control shares in Adani’s listed companies, effectively violating the minimum public shareholding rule. Several Adani companies are reportedly on the brink of delisting due to the high percentage of shares held by insiders.
Table 2: Promoter Ownership in Adani Group Companies
| Company | Promoter Ownership (%) | Public Ownership (%) |
|---|---|---|
| Adani Enterprises | 72.63% | 27.37% |
| Adani Transmission | 74.19% | 25.81% |
| Adani Power | 74.97% | 25.03% |
| Adani Total Gas | 74.80% | 25.20% |
| Adani Wilmar | 87.94% | 12.06% |
In particular, Adani Wilmar stands out, with 87.94% insider ownership, far exceeding the permissible limit. By early 2025, Adani Wilmar must reduce its insider holdings to 75% to comply with SEBI regulations, requiring the offloading of approximately 12.94% of its shares. Failure to do so could result in delisting, a consequence that could severely impact the company’s stock value.
Mauritius-Based Funds and Their Role in the Alleged Scheme
Several of the Adani Group companies reportedly have large portions of their public shareholders made up of Mauritius-based funds. These funds, which hold significant shares in Adani companies, are suspected to be acting as vehicles to conceal promoter or insider ownership. This practice allows Adani Group to:
- Keep a tight control over its stocks.
- Manipulate stock prices by reducing public float.
- Avoid full disclosure to regulators and investors.
List of Adani Companies With Large Offshore Holdings:
- Adani Transmission: 19.32% of shares held by offshore funds.
- Adani Enterprises: 15.39% of shares held by offshore funds.
- Adani Power: 12.88% of shares held by offshore funds.
- Adani Total Gas: 17.25% of shares held by offshore funds.
- Adani Green Energy: 15.14% of shares held by offshore funds.
- Adani Ports: 13.76% of shares held by offshore funds.
- Adani Wilmar: 1.57% of shares held by offshore funds.
The Fallout: Share Price Manipulation and Investor Concerns
In June 2021, Adani Enterprises saw a sharp fall in stock price by as much as 25%, while other Adani Group companies experienced drops ranging between 4%-8%.
The drop came after media reports raised concerns about the ultimate beneficial owners of offshore funds heavily invested in Adani stocks. Trading accounts linked to some of these funds were also reportedly frozen, fueling suspicions about the involvement of undisclosed insiders.
Prominent opposition politician Mahua Moitra, a former investment banker, was particularly vocal about the issue. She raised concerns over the opaque ownership structure of the Adani Group and questioned whether insider ownership was being disguised through offshore entities. In a statement, she said:
“We want to know whose money it is. If it is Adani’s money, then minority shareholders are being screwed.”
The Bigger Picture: Market Manipulation Through Offshore Entities
The key allegation is that funds from Adani Group companies are being routed through tax havens like Mauritius and invested back into the very same companies. This creates a feedback loop of insider control while maintaining the illusion of compliance with SEBI’s regulations. Such practices undermine market integrity and hurt minority shareholders, who may unknowingly be subjected to stock price manipulation.
Indian authorities are reportedly aware of these concerns, but critics argue that Adani’s deep connections in political and financial circles may have stymied any formal investigation or regulatory action.
Conclusion: A Call for Transparency
The case of Gautam Adani and his group’s alleged manipulation of stock markets via offshore funds has raised serious concerns about corporate governance in India. As more details emerge, there is a growing demand for greater transparency and accountability from both the Adani Group and regulatory bodies like SEBI. Investors, both domestic and international, are looking for clarity on the true ownership structure behind Adani’s publicly listed companies.
For more information on market regulations and insider trading laws, you can refer to:
- SEBI’s Regulatory Framework
- Adani Group’s Official Statement on Shareholding
- Corporate Governance Guidelines in India
The question remains: is Gautam Adani orchestrating one of the largest financial heists of our time, or is this simply another example of regulatory loopholes being exploited in the world of high finance?
As investigations continue, the answer may redefine India’s financial landscape for years to come.
