SEBI issues show-cause notices to six Adani Group companies
The Securities and Exchange Board of India (SEBI) has issued show-cause notices to six companies of the Adani Group. These notices, disclosed in regulatory filings, relate to alleged violations of related party transactions and non-compliance with listing rules. Additionally, questions have been raised about the validity of past auditor certificates. A show-cause notice is not an indictment but asks entities to explain why legal action should not be taken against them.
Adani Enterprises among companies receiving notices
Adani Enterprises, the leading company of Gautam Adani's business conglomerate, disclosed receiving two such notices in the quarter ending March 31. Other firms including Adani Ports & Special Economic Zone, Adani Power, Adani Energy Solutions, Adani Wilmar, and Adani Total Gas also reported similar notices from SEBI this week. Despite these notices, the companies believe they are unlikely to be impacted based on legal advice received.
Show-cause notices follow allegations by Hindenburg Research
The show-cause notices were issued following an investigation by SEBI into allegations made against the Adani Group by Hindenburg Research. Last January, the US-based short-seller accused the conglomerate of stock manipulation and accounting fraud. In its August report to the Supreme Court, SEBI disclosed that it had pinpointed 13 particular related party transactions for investigation. Adani Ports disclosed that they are accused of not obtaining necessary approvals and not making required disclosures in financial statements/annual reports.
