Africa-Press – Mauritius. Mauritian financial regulator Financial Services Commission (FSC) had in May 2022 revoked the business and investment licences of Emerging India Fund Management Ltd (EIFM), the controlling shareholder of two Mauritius-based funds that invested in publicly listed Adani companies and are now under investigation, The Indian Express has reported.
The revocation of licence means EIFM, effectively, began winding down operations. And this happened eight months before US-based short seller Hindenburg Research released its report, accusing the Adani Group of accounting fraud and stock manipulation.
The FSC Enforcement Committee’s decision was based on EIFM allegedly breaching several provisions of money laundering and corporate governance laws, noted the report.
The FSC held that EIFM “acted in breach” of various sections of the Financial Services Act, the Securities Act, the Financial Intelligence and Anti-Money Laundering Regulations (2003 and 2018) and the Code on the Prevention of Money Laundering and Terrorist Financing. The licence revocation notice is on the regulator’s website.
“These alleged breaches relate to non-compliance on maintaining records of clients and transactions, accounting and auditing standards; safeguards against dummy officers; corporate governance and the prescribed internal mechanism to identify risks of money laundering and terrorist financing,” IE reported.
EIFM was held guilty of breaching both the 2003 and 2018 versions of Mauritius’s Financial Intelligence and Anti-Money Laundering Regulations, the report added.
As per last available records, during March-April 2018, EIFM’s two Mauritius funds held 3.9% of Adani Power Limited, 3.86% of Adani Transmission Limited, and, at least, 1.73% of Adani Enterprise Limited.
A spokesperson for the FSC told The Indian Express: “When a licence is revoked, it is on a permanent basis. Following the revocation. . . licensees are directed to initiate the necessary actions for the orderly dissolution of their business and the discharge of their liabilities.
Asked about the implication of the revocation of EIFM’s licences, an Adani Group spokesperson said: “We will not be able to comment on matters pertaining to independent individual shareholders.
This news assumes significance in the wake of the Financial Times report that claimed funds from unknown sources were channelled by two British Virgin Islands shell companies – United Arab Emirates national Nasser Ali Shaban Adil’s Gulf Asia Trade and Investment Limited and Taiwan national Chang Cung-Ling’s Lingo Investment Limited — through the Emerging India Focus Funds (Mauritius) and the EM Resurgent Fund (Mauritius) under the Global Opportunities Fund (Bermuda).
According to FT, both these individuals were associates of Adani Group chairperson Gautam Adani’s brother Vinod Adani. As part of the Pandora Papers investigation, The Indian Express revealed that these two shell companies registered in the BVI were indeed connected to the Adani Group.
Additionally, as per SEBI records, under the Prevention of Money Laundering Act, Emerging India Focus Funds and EM Resurgent Fund had declared EIFM as their controlling shareholder. These are two of the 13 overseas Adani investors currently under investigation.
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