Compiled by: Business desk
Last updated: August 29, 2023, 2:35 PM IST
The Supreme Court is likely to hear the case on Tuesday.
After the Hindenburg report on the Adani Group, nearly $100 billion was wiped from the company’s market value.
The Securities and Exchange Board of India (SEBI) has found a violation of rules on disclosures by listed entities and restrictions on holding offshore funds in the Adani Group’s investigation, sources told Reuters in a report published on MoneyControl.
The SEBI’s investigation came after US-based Hindenburg Research raised several questions related to corporate governance in a report on the Gautam Adani-led Adani Group in January this year.
After the US short-selling company made allegations about the Adani group, nearly $100 billion was wiped from the company’s market value. The conglomerate has denied the allegations in the Hindenburg report since January.
Reuters has quoted sources as saying these violations are of a “technical” nature. No action other than a fine would be taken upon completion of the investigation into the violations.
The Supreme Court, which deals with SEBI’s investigation into the Adani group, is likely to hear the case on Tuesday.
Until the regulators issue orders to the Adani group, the regulators have no plans to publish the reports, the sources said. SEBI also did not respond to the e-mail about this.
Earlier on Friday, SEBI told the Supreme Court that it is nearing completion of its investigation into Adani Group’s transactions. Adani Group did not respond to a Reuters request for comment on SEBI’s findings on Monday. The email sent for SEBI’s comment has not yet been answered by the market regulator.
Sources said one of the key findings in the investigation is related to the breach of disclosure of certain related party transactions. The source said: “Related party transactions must be identified and reported.” Failure to do so may misrepresent the financial position of the Indian-listed company. However, Reuters did not say which companies SEBI investigated. .
SEBI said in the documents submitted to the court that it investigated 13 cases of related party transactions. Sources said the maximum penalty for any violation by any company could be up to Rs 1 crore ($121,000).
According to the report, the investigation also found that the offshore fund’s holdings in some Adani companies were not in line. Indian law allows an offshore investor to invest up to 10 percent through the FPI route. Investments greater than this are classified as foreign direct investment (FDI). Sources say that some offshore investors have unwittingly exceeded this limit.
