News of the ambiguity surrounding the real identity and profile of the people who put their money in three of its investment funds caused the stock market value of six companies of billionaire Gautam Adani to drop last week in which these funds have invested. News denied by the Adani group.
It all started with an article from theEconomic Times dated Monday June 14 signed by analyst Alex Sazonov. The latter announces that the National Securities Depository Ltd, central depository of securities of companies whose securities are listed on the stock market, has frozen the accounts of Albula Investment Fund, Cresta Fund and APMS Investment, three companies investment worth $ 9 billion (approximately Rs 370 billion) based in the Mauritian jurisdiction by the conglomerate of Indian billionaire Gautam Adani, of which six entities are listed on the stock exchange.
Reason given by this publication to explain the use of this suspension synonymous with freezing the trading of these securities on the stock market: the lack of transparency on the identity of those who hold securities of the companies of the Indian billionaire listed on the stock market .
Such news especially when taken by publications, such as the Times of India, whose reputation cannot be questioned, always result in the fear of existing holders who, for fear of the future, want to limit the breakage by trying to sell their securities before their value drops considerably.
Decline in stock market value
Any loss of investor confidence in a security rarely leads to a rise, but rather a drop in its market value. Thus, according to the analysis of Bloomberg Billionaires Index, which bases its figures on the last score of the situation of the securities of the companies of the Indian conglomerate carried out Wednesday, June 16, advances that the Indian billionaire would have seen his fortune fall by $ 9 billion from $ 76.6 to $ 67.6 billion.
Already in the sights of two international bodies in the financial services sector, the Financial Action Task Force (FATF) and the European Union (EU), capable of annihilating any court found guilty of serious misconduct, the Mauritian court which is waiting impatient to get out of their gray and black lists, did not need this incident involving three investment companies having chosen Mauritius as a base of operation to seek an honorable return of the money that investors have entrusted to them.
A privileged partner of Mauritius and whose witness to this close relationship is none other than the recent signing of the Comprehensive Economic Cooperation and Partership Agreement (CECPA) – hear an agreement that has gone as far as possible that a partnership agreement can go.
Seen in this light, India should have been the last country whose citizen has had a traumatic experience due to a situation originating in Mauritius.
After having been perceived by the FATF and the EU as a jurisdiction that is accused of failing in terms of the fight against money laundering and the financing of terrorism, the Mauritian jurisdiction is now faced with a situation which gives rise to the ‘impression that it totally lacks seriousness and vigilance in verifying the identity and profile of individuals at the head of investment companies who have chosen to settle in Mauritius to exploit the best positions to invest elsewhere in the world.
Yet another obstacle that the Mauritian authorities will have to overcome in order for the investment community to renew their confidence in them and to demonstrate that what happened is only a mishap and not a practice implanted in the operation of the Mauritius financial services sector.
Another factor likely to help the Mauritius court to get back on its feet after this incident is the fact that the management of the conglomerate initially spoke of a blatant error intended to mislead the investment community and then indicated that the suspension of the three funds is the result of a regulatory order that is several years old. The same spokesperson stressed that he sees no reason for the investors of these three funds to be overly concerned, given that for the last ten years, these funds have always bought securities of the companies of the Adani group.