Did Adani Group hide something? SEBI probes potential disclosure violations
India's market regulator, the Securities and Exchange Board of India (SEBI), is reportedly investigating whether the Adani Group, one of the country's largest conglomerates, flouted regulations requiring the disclosure of market-moving information. The investigation centers on the Adani Group company, Adani Green Energy Ltd., and its potential failure to properly inform investors about a US Justice Department bribery probe. The fact-finding process is expected to continue for two weeks, following which SEBI may decide on a formal investigation.
US prosecutors investigate Adani Group's involvement in bribery
Central to the SEBI investigation is a March 15 Bloomberg News report that US prosecutors were examining whether an entity linked to the Adani Group, including its billionaire chairman Gautam Adani, was involved in bribery to obtain preferential treatment for an energy project in India. In the report, the Adani Group refuted these claims, asserting that they were unaware of any investigation targeting their chairman and that they strictly adhere to anti-bribery regulations both domestically and internationally.
Adani Green acknowledges unrelated 3rd party investigation
However, on March 19, in a filing to the stock exchanges, Adani Green admitted that an investigation was underway for possible violations of American anti-corruption laws by an unrelated third party. On Wednesday, US prosecutors charged Gautam with aiding a $250 million bribery scheme to secure solar energy contracts in India and alleged the conglomerate hid this plan while seeking funds from US investors. A spokesperson for the Adani Group has denied these allegations.
US indictment alleges false statement by Adani Group
The US indictment indicates that the Adani Group's denial to Bloomberg in March was a false statement made to advance the alleged fraud scheme. This allegation is premised on the fact that Gautam's nephew, Sagar Adani, had received a grand jury subpoena and search warrant a year prior. Sagar is the executive director of Adani Green, India's largest renewables developer.
Adani Group's stock plunges following US indictment
After the US indictment, shares of Adani's flagship company plummeted as much as 23% on Thursday. However, they recovered some losses on Friday. Notably, SEBI has previously probed the Adani Group over matters like disclosure norms after Hindenburg's allegations and is yet to reveal its findings. The regulatory body can only file civil charges and violations of disclosure usually lead to a monetary penalty.
