Swiss prosecutors have frozen $310 million in the Adani investigation

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Swiss prosecutors have frozen $310 million held at six Swiss banks by a person they suspect of being “a ringleader” for Adani, the controversial Indian conglomerate battling fraud allegations.

A decision by the Federal Criminal Court published this week, which rejected an appeal against “seizure” orders, revealed that allegations of criminal activity and money laundering in relation to Adani have been under investigation in Switzerland since at least December 2021.

The probe predates a January 2023 report by US short-selling firm Hindenburg Research, which accused Adani of running “the biggest fraud in corporate history” by using insiders to manipulate the conglomerate’s stock valuation.

Swiss prosecutors suspect the alleged leader is “not the true beneficial owner” of the company that holds the $310 million seized, the ruling said.

Prosecutors instead suspect he was entrusted with substantial sums by the Adani group, which were then invested in Adani’s listed companies in violation of stock market rules to artificially inflate their value, according to the ruling.

It made no finding other than deciding to maintain the freezing order based on suspicion.

Adani, a politically connected group with widespread interests in transport infrastructure, energy and media, has strongly denied any wrongdoing.

While the Swiss criminal courts do not identify the participants by name, its descriptions of the parties by reference to the Hindenburg dossier and subsequent reporting in the Financial Times match Adani and its suspected leader, Taiwanese businessman Chang Chung-Ling.

A lawyer representing the alleged ringleader’s company, which filed the Swiss appeal, did not immediately respond to requests for comment.

Adani said it had not received any requests for information or clarification from Swiss authorities and that its “overseas holding structure is transparent, fully disclosed and compliant with all relevant laws”.

It added: “These allegations are patently absurd, irrational and absurd. We have no hesitation in stating that this is yet another orchestrated and blatant attempt by the same cohorts acting in unison to cause irreversible damage to our group’s reputation and market value.”

Chang is a long-time associate of the Adani Group. The FT previously reported that he was one of two investors who traded Adani shares using layers of offshore entities that concealed Chang’s identity, in a structure overseen by a person working for Vinod Adani, the brother of the conglomerate’s founder.

At the time, Chang said “I don’t know anything about it” when asked if he was an Adani associate who secretly bought shares for them. He suggested to the reporter “it might be AI” and finally hung up. Vinod Adani did not respond to requests for comment.

The FT also reported that in recent years, Chang had sold $2 billion of coal to Adani at what appeared to be above-market prices, using a business registered at his home address in Taiwan.

The Swiss ruling says that the prosecutor in Geneva opened an investigation into suspected money laundering and document forgery in December 2021, following a report by the Money Laundering Reporting Office, and that federal prosecutors took over the case in July 2023.

Prosecutors also found it suspicious that the company tried to use such Adani investments as collateral for a line of credit “which could constitute an attempted fraud, given the suspected overvaluation of the securities,” the decision said.

News of the judgment was first reported by online magazine Gotham City.

The appeal was filed in March of this year by the company that owns the seized goods.

The court found that the facts were sufficient to uphold the order and held that “appellant is clearly unable to provide (the federal prosecutors) with the explanations — in the form of supporting documents — that they should be able to provide in the order. to dispel legitimately raised doubts”.