What You Must Know!
Shares of Adani group companies, including Adani Enterprises Ltd, Adani Power Ltd, Adani Green Energy Ltd, Adani Wilmar, and Adani Energy Solutions Ltd, are expected to be the highlight on Monday morning following a statement from the market regulator SEBI. SEBI confirmed that its investigations into all but two allegations against the Adani group have been completed. However, the regulator told the Supreme Court (SC) that it is still waiting for data from five tax havens to determine the true owners behind foreign investors investing in the conglomerate.
- SEBI initiated investigations following accusations from Hindenburg Research against the Adani Group.
- The accusations were made earlier in January.
- Adani Group was accused of:
- Stock manipulation
- Fraudulent transactions
- Other financial misdeeds
Hindenburg Research alleged that the Adani Group:
- Used offshore companies in tax havens
- Manipulated share prices through these companies
- Manipulated financial outcomes using these offshore entities
- The report indicated potential non-compliance concerning, Disclosure laws and Shareholding laws.
- The Adani Group has denied all these allegations.
2. Adani’s Response to Allegations and SC’s Involvement
Responding to the allegations from the Hindenburg Research, the SC had tasked SEBI with investigating the claims and presenting its findings to a six-member panel, which includes a retired judge and seasoned bankers.
Gautam Adani, the founder of the group, commented on the report calling it a mixture of targeted misinformation and discredited allegations, with most of them dating back from 2004 to 2015. During Adani Enterprises Ltd’s annual general meeting, Gautam Adani clarified that these allegations had already been addressed by relevant authorities in the past. He emphasised that the Hindenburg report was a calculated and malign attempt to tarnish the Adani group’s reputation, aiming to profit in the short term by depressing Adani group stock prices.
3. SEBI’s Investigative Measures and Current Status
Securities and Exchange Board of India (SEBI), without revealing the results of its investigations, provided a thorough breakdown of its investigative actions, which includes examining related party transactions. The regulator’s investigation spanned some offshore deals involving 12 foreign portfolio investors who are public shareholders of Adani Group companies. SEBI has requested information from five nations concerning these FPIs.
However, since some of the entities associated with these investors are based in tax haven jurisdictions, SEBI noted a challenge in establishing the economic interest of shareholders of the 12 FPIs. An interim report concerning the trading of Adani group stocks before and after the release of the Hindenburg report has been approved, with information from other agencies actively being pursued.
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