Mauritius Revokes Licences of Firm Linked to Adani Investors Over Money Laundering Concerns

The Financial Services Commission (FSC) of Mauritius revoked the business and investment licences of Emerging India Fund Management Ltd (EIFM), the controlling shareholder of two Mauritius-based funds that had invested in listed Adani companies. This action took place in May 2022, eight months before the Hindenburg report raised concerns about the Adani Group's operations.

The FSC's Enforcement Committee cited several violations by EIFM, including breaches of laws aimed at preventing money laundering and ensuring corporate governance. These breaches pertained to failure to maintain client and transaction records, non-compliance with accounting and auditing standards, insufficient safeguards against dummy officers, and corporate governance shortcomings. Additionally, EIFM did not establish adequate internal mechanisms to identify money laundering and terrorist financing risks.

The revocation of EIFM's licences forced the firm to begin winding down its operations. This decision is particularly significant because two of the 13 overseas Adani investors currently under investigation, Emerging India Focus Funds and EM Resurgent Fund, had EIFM as their controlling shareholder.

When questioned about the implications of this action, an Adani Group spokesperson declined to comment, citing the matter's association with independent individual shareholders. Interestingly, the Hindenburg report did not mention EIFM.

Notably, EIFM was found guilty of violating both the 2003 and 2018 versions of Mauritius's Financial Intelligence and Anti-Money Laundering Regulations. In 2018, EIFM's funds held substantial stakes in Adani Power Limited, Adani Transmission Limited, and Adani Enterprise Limited.

Recent revelations, based on documents accessed by the Organized Crime and Corruption Reporting Project (OCCRP) and reported by the Financial Times, suggested that unknown sources channeled funds through British Virgin Islands shell companies to trade in Adani stocks via Emerging India Focus Funds and EM Resurgent Fund. These shell companies were linked to the Adani Group, as revealed in records from offshore corporate service provider Trident Trust during the Pandora Papers investigation.

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