Political Economy

Watch: Former SEBI Chief Says Adani Story by FT-OCCRP 'Very Persuasive'

M. Damodaran called for a thorough and diligent investigation. SEBI cannot 'turn a Nelson’s eye,' he said.

One of SEBI’s most respected former chairmen has said stories by The Financial Times based on documents shared by the Organised Crime and Corruption Report Project, which raises disturbing questions and makes worrying allegations about the Adani Group, is “very persuasive”.

Speaking on the Financial Times report, M. Damodaran said it is “well-compiled and a credit to those who put it together”. He said there’s “a presumption some of this is correct”. However, Damodaran added that as yet the report is “not conclusive”, explaining that the distance between “very persuasive” and not “not conclusive” must be covered by a thorough and diligent investigation. SEBI cannot “turn a Nelson’s eye”.

In a 30-minute interview to Karan Thapar for The Wire, Damodaran, who is at present the director of companies such as Larsen and Toubro, Hero MotoCorp, Tech Mahindra, CRISIL and Biocon and non-executive chairman of IndiGo, said this is “clearly a matter for investigation and it must be done quickly”. He added “most if not all elements (of The Financial Times story) need to be looked at.”

The FT story is based on documents shared by the Organised Crime and Corruption Report Project. The documents were also given to The Guardian, who did a similar but separate story. The interview also refers to The Guardian and OCCRP stories.

Asked specifically about two men, Nasser Ali Shaban Ahli of UAE and Chang Chung-Ling of Taiwan, who the FT story suggests could be “front men” for the Adani family, Damodaran said “it is possible they are frontmen”, adding this needs to be examined.

Damodaran said that if, after diligent examination, it turns out that Ahli and Chung are frontmen, then it would appear that the total shareholding of the Adani family in Adani Group companies has breached SEBI regulations. In that event, he said, one legitimate suspicion would be the possibility of share price manipulation.

Whilst fulsomely praising the FT story, Damodaran added it is one reason why SEBI must thoroughly investigate the matter. He said he was confident SEBI would do so “diligently and thoroughly” but not that confident of how quickly it would complete the investigation. As Damodaran jocularly put it, with age he has become “impatient” and wants to see things completed quickly.

There’s a substantial section of the interview where Damodaran is questioned about the fact that in January 2014 the Directorate of Revenue Intelligence had raised with then SEBI Chairman, U. K. Sinha, fears of suspicious investment and disinvestment in the Adani Group. Damodaran is asked if SEBI took this seriously. Whilst the DRI, after three years, may have closed its own investigation into siphoning of funds, the fear of suspicious investments and disinvestments in the Adani Group, which DRI sought to attract SEBI’s attention to, was for SEBI to investigate.

In the light of the conversation that followed on this issue, Damodaran was also asked about an apparent contradiction between the DRI letter of January 2014 (when Sinha was chairman of SEBI) and what Sinha himself said to The Wire in an interview in February 2023: “Let me say that to the best of my information the fact that there is round-tripping happening and that is why the share prices have gone up like this, according to my understanding and knowledge, that has come in public domain for the first time after the Hindenburg report.”

Watch the interview here.