Mauritian Financial Services Minister Mahen Kumar Seeruttun has told the nation’s Parliament that Hindenburg Research’s allegations of the presence of ‘shell’ companies in the Island nation are ‘false and baseless’ and that Mauritius was in compliance with the tax rules mandated by the Organization for Economic Cooperation and Development.
US short seller Hindenburg on January 24 alleged that billionaire Gautam Adani used shell companies based in Mauritius to manipulate stock prices of his Indian-listed companies.
When a Member of Parliament (MP) through a written notice question asked the Minister about Hindenburg’s allegation of use of Mauritius-based entities as conduits for money laundering and share price manipulation for the Adani Group, the minister said the nation’s law does not allow shell companies.
“At the outset, I wish to inform the House that the allegations of the presence of shell companies in Mauritius are false and baseless,” he said. “According to the law, shell companies are not allowed in Mauritius.” “So far, there has been no breach that has been found,” he said.
He said the Financial Services Commission has taken note of the Hindenburg report but the regulator is bound by the confidentiality clause of the law and cannot disclose details.
“The Financial Services Commission can neither deny nor confirm whether an investigation has been and/or is being conducted” he said.
Dhanesswurnath Vikash Thakoor, chief executive officer, of FSC, had previously stated that an initial assessment of all the entities related to the Adani group in Mauritius was not found to be any non-compliance with rules.
The statement came just before the Hindenburg-Adani issue comes up in Supreme Court. The apex court, which had appointed an expert committee to look into regulatory issues.
Short seller Hindenburg raised allegations of fraud and stock price manipulation against the group. Adani Group, however, has denied all the charges.
“With respect to the allegation of Mauritius being a tax haven, I wish to inform the House that Mauritius strictly complies with the international best practices and has been rated as compliant with the Organisation for Economic Cooperation and Development OECD standards,” the Mauritian minister told the Parliament.
He said the Financial Services Commission monitored the Adani issue closely. “The commission is pursuing its actions within the ambit of the relevant legislations and in line with its current supervisory process. It has been carrying out reviews of all the companies cited in the Hindenburg report.”
When the MP asked how he arrived at the conclusion that allegations made in the report are ‘false and baseless’, the minister said he was referring to the statement made the report with regard to shell companies being registered in Mauritius.
“And this is, like I said in my reply, to be able to be licensed in Mauritius, there are conditions and requirements that need to be satisfied. And those conditions, I have spelled out all those conditions, and based on the fact that these companies adhere to those conditions, then it is unfounded to say that those companies are shell companies” he said
