A scathing report has dealt a fresh blow to the Adani group, which was just beginning to bounce back from a market rout after short seller Hindenburg Research’s accusations that the conglomerate had pulled off the “largest con in corporate history”. The new report, published by the Organised Crime and Corruption Reporting Project (OCCRP), calls out the group’s alleged use of offshore funds to invest in its own stocks, identifying two investors “hidden behind secretive offshore structures”.

OCCRP is a global network of investigative journalists founded in 2006.

First, a look at the revelations.

OCCRP’s findings: The report reinforces some of the allegations made by Hindenburg, which had found stock price manipulation and dubious shareholding patterns, among other issues.

So, what’s new?

The findings indicate that between 2013 and 2018, millions of dollars that were invested in publicly traded shares of the Gautam Adani-led group were through Mauritius-based “opaque” funds owned by people close to the promoter family. (Also read: The Adani group’s Mauritian migraine.) The report names two individuals—Nasser Ali Shaban Ahli and Chang Chung-Ling—who it says secretly invested in the group and have “longtime business ties” with the Adani family.

It also says the two have served in firms associated with Vinod Adani, Gautam’s older brother (we have written about Vinod Adani’s curious relationship with the Adani group).

To be clear, the Hindenburg report had also named the offshore companies that the new findings mention, but it did not identify the two men. The new findings disentangle the complex web of transactions and ownership to unveil their links to the Adani family.

The ports-to-power conglomerate had earlier denied that Vinod Adani was involved in the conglomerate’s business affairs. However, it admitted in March that he was indeed part of the promoter group. (Also read: The Adani group does not own Ambuja Cements and ACC.)

Why this is a problem: Market regulations in India require that promoters of publicly listed companies should hold a maximum of 75% stake; the rest must be publicly available for trading on the bourses.

At the peak of their investment, Ahli and Chang, through their two Mauritius-based funds, held public shares ranging from 8% to nearly 14% in four group companies—Adani Power, Adani Enterprises, Adani Ports and Special Economic Zone and Adani Transmission.

If Ahli’s and Chang’s stakes are added to the promoter group’s shareholdings—since the funds owned by them were allegedly indirectly controlled by Vinod Adani—they surpass the 75% limit.

“If true, it could mean a violation of Indian financial market regulator SEBI laws for publicly listed stocks, that could sway the outcome or push SEBI to dig deeper in its ongoing investigation into the group,” Lakshmanan R., a senior research analyst at CreditSights, told Reuters.

A market analyst cited in the OCCRP report explained how this pushes up share prices. When companies buy or sell their own shares, they create an apparent scarcity in the market, pushing up share prices in the process. This uptick makes companies seem like they are in good shape, pushing their market value. It also helps them secure loans and “float new companies”, the analyst said in the report.

Shares of the Adani group companies took a hit after the report’s release. Adani Enterprises (the group’s flagship company) closed 3.77% lower, while Adani Ports fell 3.37% at the day’s close. Adani Power dropped 2.24%, and Adani Transmission fell 3.52%.

Enter SEBI: After the report was published Thursday, sources close to SEBI told Reuters that the funds named by the OCCRP are already part of the regulator’s investigation into the Adani group’s violations of public float norms. They added that the regulator would consider “any new facts” that have emerged.

This isn’t the first time that the ties between the two men and the Adani family have surfaced. In 2007 and 2014, the Directorate of Revenue Intelligence—India’s financial investigative agency—had found instances that Ahli and Chang were involved in schemes such as illegal diamond trading and over-invoicing. In 2014, the DRI had written to the Securities and Exchange Board of India that it had proof that money from the scheme sent to Mauritius made its way to Dalal Street, the OCCRP report says.

“There are indications that a part of the siphoned-off money may have found its way to stock markets in India as investment and disinvestment in the Adani Group,” DRI’s then director Najib Shah had reportedly told SEBI.

The Guardian said Shah had sent the necessary material to SEBI as the regulator was understood to be looking into the Adani group’s dealings. However, SEBI’s interest in the probe seemed to wane after May 2014, when the Narendra Modi-led BJP came into power, The Guardian added, citing a source who worked with the regulator at the time.

The SEBI has, on its part, maintained that claims of it investigating the Adani group before 2020 are “factually baseless”. An expert committee appointed by the SC, which is overseeing SEBI’s investigation into the claims made by Hindenburg, said the regulator had “hit a wall” and “drawn a blank” in establishing the links between offshore investors and the Adani group. We have written about the key takeaways from the committee’s report.

Last week, the regulator told the apex court in a filing that it is close to completing its investigation. According to a Reuters report citing unnamed individuals, the investigation has revealed violations of rules on disclosures but these were largely “technical” and would attract only a monetary penalty.

Given the latest findings, which the Adani group has dubbed “recycled allegations”, SEBI would do well to show that its probe is thorough and devoid of any pressure—political or otherwise.

Read all our coverage on the Adani group here.