Adani-Hindenburg Row: Mauritius Minister Calls Allegations Of Shell Companies 'False And Baseless'

Mauritian Financial Services Minister Mahen Kumar Seeruttun rejected the allegations made by Hindenburg Research on the Adani Group using Mauritius as a haven for creation of shell companies.

Seeruttun, speaking at the nation's Parliament, said that allegations of the presence of shell companies in Mauritius are "false and baseless".

"According to the law, shell companies are not allowed in Mauritius," he said. All global business companies licensed by the Financial Services Commission have to meet substance requirements on an ongoing basis, he said.

The requirements, he said, include carrying out their core income generating activities in or from Mauritius, be managed and controlled within the country, administered by a management company and have at least two directors resident of sufficient caliber to exercise independence of mind and judgment in Mauritius.

Requirements also include maintaining principal bank account in Mauritius, keep and maintain at all times their accounting records at their registered office within the country, prepare their statutory financial statements and have them audited in Mauritius, and provide for meetings of directors to include at least two directors from Mauritius, he said.

Emphasising on the country's tax regime, the minister said that it was in compliance with the Organisation for Economic Cooperation and Development mandated rules.

The Financial Services Commission is collaborating with law enforcement agencies in Mauritius and overseas regulators on this matter, he said.

While the minister said that he can neither deny nor confirm whether an investigation has been and/or is being conducted in the matter, he said that Adani Group companies in Maturities adhere to the above mentioned conditions and cannot be called as shell companies.

"...like I said in my reply, to be able to be licensed in Mauritius, there are conditions and requirements that need to be satisfied. And those conditions, I have spelled out all those conditions, and based on the fact that these companies adhere to those conditions, then it is unfounded to say that those companies are shell companies."

Hindenburg Research had alleged in a report on Jan. 24 that the Adani Group has high levels of debt and was involved in stock manipulation. The conglomerate refuted the allegations as "misinformation" and a "calculated attack on India".

This report came days before Adani Enterprises Ltd. launched its Rs 20,000-crore follow-on public offer, causing the listed stocks of Adani Group to nosedive. The group decided not to go ahead with the FPO as the share price slipped below the offer price.

One of the research firm's allegations was that Adani Group has a network of offshore shell companies, including in Mauritius. The group has called the accusations "malicious" and aimed at damaging the now-withdrawn follow-on offer of Adani Enterprises Ltd.