Over the past year, market regulator Securities and Exchange Board of India (Sebi) has boosted its examination of transactions by Adani Group. Sebi will also examine a recent report released by short-seller Hindenburg Research.
Details about Adani Group is probably going to get more SEBI scrutiny
According to two individuals cited in a Reuters story, this is in addition to Sebi’s ongoing preliminary inquiry of the group’s international portfolio interests.
One of the sources cited in the paper claimed that “SEBI has been increasingly looking at all the transactions that Adani Group has been engaging in in the listed arena.”
After Hindenburg published a report accusing the Gautam Adani-led company of stock manipulation and inappropriate use of offshore tax havens, shares of the Adani Group have been under to intense pressure. It also raised red flags regarding excessive debt.
The conglomerate has denounced the article as “baseless” and “malicious,” and it has stated that it intends to file a lawsuit for causing severe harm to its investors and shareholders.
In response, Hindenburg asserted that it stands by its conclusions and that any legal action taken against it would be “meritless.” Additionally, it requested that Adani Group file a lawsuit in the US, where it conducts business, allowing it the chance to make additional document requests as part of legal discovery.
The publishing of the Hindenburg report just a few days before the FPO of the group’s flagship company, Adani Enterprises, was questioned by the majority of analysts. They did, however, concur that the report is the primary cause of the sharp decline in domestic stock prices.
The market authority launched an investigation in July 2022 into unknown offshore funds with Mauritius-based interests in significant amounts of listed firms owned by the Adani Group, which might have indicated stock price manipulation.
But at the time, the absence of information from the countries where these money were domiciled caused Sebi’s inquiry to stall.
According to additional sources cited in the Reuters story, Hindenburg’s research reveals worries about the movement of money from parties connected to the Adani Group through offshore funds and back into local firms that are comparable to those the regulator had.