Are Swiss prosecutors investigating the Adani Group, and who is Chang Chung-Ling?

Swiss authorities have reportedly frozen six bank accounts worth $310 million (CHF263 million) of an individual whom they believe to be "a frontman" for the Indian conglomerate Adani Group.

This is based on reports, and comes as the Indian giant is accused of money laundering and financial fraud.According to reports, the Federal Criminal Court's ruling disclosed that charges of criminal behaviour and money laundering involving Adani had been investigated in Switzerland since at least December 2021.

The decision rejected an appeal against the "sequestration" orders.

A Financial Times report showed the investigation was initiated before US-based short-selling company Hindenburg Research published a report in January 2023 accusing Adani of orchestrating the "biggest con in corporate history" by employing front persons to influence the Group's stock market valuation.

According to the FT, the judgement said that Swiss prosecutors believe the so-called "frontman" is "not the actual beneficial owner" of the firm with the $310 million that is frozen.

The court ruling showed prosecutors believe that the Adani group entrusted him with large quantities of money, which he then invested in Adani's listed firms in a way that violated stock market regulations, fraudulently inflating their value.

The judgement did not reach any other conclusions beyond determining to uphold the freezing order in light of the accusations.

Reports showed that while the Swiss criminal court did not name the parties involved, the top court's description referenced Hindenburg's dossier.

In response to WION's request for comments on media reports, Claudia Balzli, Communication Specialist at the office of the Attorney General of the Swiss Confederation (OAG) replied in French.

The google translation reads, 'As indicated in the TPF decision...-page 2 - on July 20, 2023, the Public Prosecutor's Office of the Confederation - MPC - took over criminal proceedings in the canton of Geneva. In the context mentioned in the said decision, the MPC is currently carrying out investigations for forgery of securities - art. 251 CP- and aggravated money laundering -art. 305bis ch. 1 and 2 CP- Investigations are ongoing, which is why the MPC cannot give you further information at this stage. As always, the presumption of innocence applies.'

And a Financial Times' follow-up coverage links Adani to the Taiwanese tycoon Chang Chung-Ling, who is believed to have served as the company's "frontman."

Hindenburg ups the ante

According to Hindenburg's tweet on social media platform X, the investigation into the Adani group's financial dealings with opaque offshore entities and money laundering began in 2021.

Quoting a Swiss media report, Hindenburg said that even before it levelled allegations of fraud, the Geneva public prosecutor's office looked into possible violations by the Indian giant.

https://x.com/HindenburgRes/status/1834265857515499620

Adani Group responds

In response, the Adani group stated that its "overseas holding structure is transparent, fully disclosed, and compliant with all relevant laws," adding that the company has not received any requests for clarification or information.

In a media statement, the Group said, "We unequivocally reject and deny the baseless allegations presented. The Adani group has no involvement in any Swiss court proceedings, nor have any of our company accounts been subject to sequestration by any authority. Furthermore, even in the alleged order, the Swiss court has neither mentioned our group companies nor have we received any requests for clarification or information from any such authority or regulatory body."

The Indian conglomerate added, "We reiterate that our overseas holding structure is transparent, fully disclosed, and compliant with all relevant laws."

Who is Chang Chung-Ling? And does he have links to the Adani Group?

The FT reported that the Adani group has known Chang Chung-Ling for a long time.

A person working for Vinod Adani, the brother of the conglomerate's founder, oversaw the arrangement wherein he and another investor exchanged Adani stocks using offshore corporations that concealed Chang's name.

The FT previously revealed this.

When FT questioned if he was an acquaintance of Adani, who covertly bought shares for them, Chang responded, "I know nothing about this.".

He then hung up after speculating that the reporter at FT "might be AI."

According to the FT, Chang allegedly charged Adani $2 billion for coal in the last several years, using a company registered to his Taiwanese home address, even though the rates seemed higher than market value.

What does the FT say about the Swiss judgement?

According to the Swiss judgement, in December 2021, the public prosecutor of Geneva began an investigation into allegations of money laundering and document forgery based on a report from the Money Laundering Reporting Office.

In July 2023, Federal prosecutors assumed control of the case.

The ruling said prosecutors were sceptical of the company's intention to use the Adani investments as collateral for a credit line, stating that this "would be likely to constitute an attempted fraud given the suspected overvaluation of the securities."

The online journal Gotham City broke the news of the verdict first.

In March of this year, the business with the frozen assets lodged its appeal.

The court concluded that the facts were enough to uphold the order since "the appellant is clearly unable to provide the federal prosecutor's office with the explanations — in the form of supporting documents — which it should be able to provide in order to dispel the doubts legitimately raised."

Congress vs Adani & SEBI chief

In India, calls for a thorough and independent probe into the allegations against the Adani group have risen.

The allegations, denials, and counter-allegations saga continues, with India's market regulator in the crosshairs.

Since Hindenburg's allegations of conflicts of interest against SEBI chief Madhabu Puri Buch, India's main opposition party, the Congress, has upped its attacks on the market regulator's chief.

The Congress party's top leaders have come up with new evidence supporting their accusations against the SEBI chief.

Separately, Hindenburg also questioned Buch's silence on the series of allegations levelled at her.

In response, SEBI chief Madhabi Puri Buch and her husband, Daval Buch, denied all the allegations in a joint media statement.

The statement quoting companies brought into the controversy dismissed the accusations.

In addition, the press note also highlighted Daval Buch's work experience to quash conflict of interest claims.

A case against Buch

Separately, Indian minister Mahua Moitra filed a Lokpal complaint against the Sebi Chief over alleged Adani links.

In India, a Lokpal complaint is a case filed against a public servant for an alleged offence under the Prevention of Corruption Act, 1988.

In a tweet on social media X, Mitra said, "My Lokpal complaint against Ms Puri-Buch has been filed electronically & in physical form. Lokpal must within 30 days refer it to CBI/ED for a preliminary investigation and then a full FIR enquiry."

She added that "every single entity involved needs to be summoned & every link investigated."