In a surprising turn of events, the Adani Group probe has been reopened in 2023. The statement of governance concerns by US-based short seller Hindenburg Research served as the impetus for this revival. It’s important to note that the Adani Group immediately denied these accusations. According to the prestigious news agency, Reuters, as the plot develops, the Securities and Exchange Board of India (Sebi) seems prepared to explain the complexities of its 2014 inquiry against the Adani Group, a case that had been suspended and is now being revived.
The market watchdog will formally inform the Supreme Court of India of its initial knowledge of the probable theft of offshore funds by Adani Group firms, which occurred back in 2014, according to sources familiar with the situation. However, insider testimonies referenced in the news agency’s story indicate that this initial investigation proved to be fruitless and abruptly ended in 2017.
In 2023, the probe into the Adani Group was reopened. Fast forward to the present. The Hindenburg Research charges, which threw doubt on the Group’s governance and which the Adani Group vigorously fought to dismiss, were followed by this development. This information is made even more intriguing by Sebi’s glaring silence regarding its Adani Group inquiry from 2014 in general. If this information is revealed, it would be the first time the market’s regulating agency has acknowledged publicly that its earlier investigation into the conglomerate’s conduct.
In order to emphasize that a concerned public interest litigant had previously accused Sebi of concealing the 2014 notice, the Reuters piece makes a steep detour. This notice claimed that offshore companies were manipulating stock prices. According to a reliable source, Sebi started investigating these claims in January 2014. The regulatory authority, however, faced significant difficulties in obtaining evidence from foreign countries relevant to the probe between then and 2017.
The Directorate of Revenue Intelligence (DRI) also entered the fight, warning Sebi of the alleged overvaluation of equipment and machinery imported from a United Arab Emirates (UAE)-based firm by Adani Group entities. This added yet another layer of complication to the already convoluted story. The DRI argued that a portion of the money spent on these transactions may have gone back to the publicly traded companies owned by the Adani Group. According to an individual referenced in the news agency’s story, a DRI adjudicator unequivocally rejected the DRI’s charges in 2017.
As luck would have it, the DRI decided to appeal the adjudicator’s ruling, which put a stop to Sebi’s inquiry. However, this appeal was unsuccessful in 2022 because a higher court found the evidence to be questionable. In March 2023, the Supreme Court decided that the case was not important enough for it to get involved, which was a further setback.
The Supreme Court is been closely monitoring Sebi’s continuing inquiry into the Adani Group. Sebi stated in an August status report that it was almost finished with its investigation and was looking into possible public float rules violations by the Adani Group, particularly with regard to offshore funds and irregular trading activities prior to the publication of the Hindenburg report.
As Sebi navigates a complicated inquiry that spans over ten years and is riddled with legal difficulties and complex financial machinations, the Adani Group issue continues to capture the interest of the financial community. One of the biggest business enterprises in the country’s future is at stake as this high-stakes drama unfolds in the Indian courts.
