Adani disputes Rahul Gandhi’s Rs 20,000 cr claim, saying group firms received USD 2.6 bn stake sale money

New Delhi : Billionaire Gautam Adani’s group listed details of USD 2.87 billion stake sales in group firms since 2019 and how USD 2.55 billion of this was ploughed back into business on Monday, as it sought to counter Congress leader Rahul Gandhi’s claim of Rs 20,000 crore flowing into the conglomerate through “shell companies.”

According to a report published by PTI, while investors like Abu Dhabi-based International Holding Company PJSC (IHC) invested USD 2.593 billion in Adani Enterprise Ltd and Adani Green Energy Ltd (AGEL), promoters sold stakes in Adani Total Gas Ltd and AGEL to raise USD 2.783 billion. “These funds were reinvested by promoter entities to support the growth of new businesses and portfolio companies such as Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd, Adani Transmission Ltd, and Adani Power Ltd,” according to the group.

The statement was issued in response to reports in an international publication that appeared to be the basis for Gandhi’s statement late last month, in which he questioned how “Rs 20,000 crore suddenly arrived in Adani’s shell companies.” “We understand how appealing the competitive race to demolish Adani can be.

“However, we are fully compliant with securities laws and are not concealing promoter ownership and financing,” the company stated. Adani said promoters raised USD 2 billion in January 2021 by selling a 20% stake in renewable energy firm AGEL to French conglomerate TotalEnergies.

Prior to that, they sold a 37.4% stake in Adani Total Gas Ltd to the same French firm for USD 783 million. Adani stated that the funds were obtained through the sale of a stake in Adani Total Gas. They were also not obscure entities because they were promoted. TotalEnergies acquired the promoters’ overseas investment vehicles in order to make some of those investments.

And the funds received from overseas were reinvested in group entities, which some refer to as “shell company” investment. According to the statement, “these funds were reinvested by promoter entities to support the growth of new business.” “The promoter entities have had significant holdings in Adani companies that have grown over time.” These entities have been able to increase their investments due to the timely application of funds received from the sale of equity.”

According to the company, all transactions were made public through stock exchange filings. It also stated that “the Adani family deployed its returns from the secondary sale to make additional purchases of AGEL equity and to provide support to AGEL via a shareholder loan and other securities – all of which are also in the public domain.”

The Adani group’s rapid, debt-fueled growth was called into question in January by a US short-seller Hindenburg Research, which alleged accounting fraud and the use of a labyrinthine network of mostly Mauritius-based shell companies to route funds into India to manipulate share prices of the group’s seven listed companies or make their balance sheets look healthier.

While the Adani group has strenuously denied all of Hindenburg’s allegations, opposition parties and leaders, including Gandhi, have seized on the allegations to target Prime Minister Narendra Modi and demand investigations into Adani’s foreign connections. Adani stated that it had publicly disclosed all details and reporting on funds invested in group companies that had been incorrectly mixed with primary and secondary investment. “The information is readily available and transparent.” They are available through relevant securities regulatory filings made at the time and are public record,” the statement said, adding that the “misleading narrative” has become a “regrettable” political issue.