Sebi probes Adani Group's alleged disclosure failures post US SEC charge

India's capital markets regulator, the Securities and Exchange Board of India (Sebi), is examining whether the Adani Group violated disclosure norms by failing to share critical market-sensitive information, according to a report by Bloomberg, citing sources familiar with the matter. 

 

The inquiry centres around allegations that Adani Green Energy Ltd did not adequately disclose the US Justice Department's investigation into bribery claims.

 

In response, Sebi has sought inputs from stock exchanges regarding these concerns and plans to conduct a fact-finding exercise over the next two weeks, the report said. Based on its findings, Sebi may decide whether to initiate a formal investigation.

 

Sebi has previously investigated the Adani Group for disclosure-related issues, including allegations raised by short-seller Hindenburg Research last year, but has yet to publish its findings.

 

Typically, disclosure violations attract monetary penalties, as Sebi is limited to filing civil charges.

 

US probe into Adani Group

 

The investigation follows a March 15 report by Bloomberg News, which revealed that US prosecutors were probing whether Adani-related entities or individuals, including its chairman, were involved in bribery to secure preferential treatment on an energy project. At the time, the Adani Group denied knowledge of any investigation against its chairman, asserting compliance with anti-bribery laws.

 

On March 19, Adani Green disclosed in a regulatory filing that it was aware of an investigation related to a third party’s potential violations of US anti-corruption laws.

 

US authorities file charges against Adani Group

 

This week, US prosecutors charged Gautam Adani with orchestrating a $250 million bribery scheme to secure solar energy contracts in India. They also alleged that the conglomerate concealed these actions while raising funds from US investors.

 

The Adani Group has denied the charges

 

U.S. prosecutors allege in their indictment that the Adani Group's denial to Bloomberg in March was a false statement intended to advance the purported fraud scheme. They point out that Sagar Adani, Adani's nephew and the executive director of Adani Green—India’s largest renewable energy developer—had received a grand jury subpoena and search warrant a year prior.

 

Adani stocks plummet

 

Indian stock exchanges, as frontline regulators under Sebi's purview, are tasked with enforcing disclosure norms. Shares of Adani’s flagship company tumbled by as much as 23 per cent on Thursday following news of the indictment but recovered some losses on Friday.