The wide-ranging probe was initiated on 2 March following a Supreme Court directive in response to a public interest litigation (PIL) plea over allegations made against the group by US-based short-seller Hindenburg Research on 24 January.
Of these, reports on 22 are final and two are interim, Sebi said, and added that all final reports and one interim investigation report have been approved by the competent authority. As for the remaining one report, its interim findings too have been approved by the competent authority.
For the interim investigation reports, Sebi has sought information from external agencies, and once it receives the same, it will evaluate the veracity of the information with the interim investigation report to determine the course of action.
Of the 24 investigations, two pertain to manipulation of stock prices, 13 are on Adani Group’s alleged failure to disclose related party transactions, and eight related to possible violations of Sebi’s foreign portfolio investment rules, substantial share acquisition norms and insider trading regulations.
The market regulator said it has thoroughly analyzed trading patterns to assess possibilities of price manipulation. While doing so, Sebi has also scrutinized trading by three clusters of FPIs.
The regulator analyzed data on 347 million trades in seven Adani firms—Adani Enterprises, Adani Ports & SEZ Ltd, Adani Green Energy Ltd, Adani Transmission Ltd, Adani Power Ltd, Adani Total Gas Ltd and Adani Wilmar Ltd—between 1 March 2020 and 31 December 2022 for suspected stock price manipulation.
For assessing the fairness of related party transactions at Adani Group, Sebi investigated certain transactions between Adani group firms and Adani Infrastructure Management Services Ltd; transactions entered into between Krunal and Sunbourne in 2008-09 and subsequent transactions between Sunbourne and group’s listed flagship Adani Enterprises Ltd in FY20.
Also, the regulator analyzed a transaction between Gardenia Trade and Investments Ltd and Adani Infra (India) Ltd. (AIIL), and a subsequent loan transaction by AIIL with group firms including Adani Enterprises and Adani Power Mundra Ltd.
Sebi said it has also probed a transaction by AIIL with Rehvar Infrastructure Pvt Ltd and Milestone Tradelinks Pvt Ltd. Post this, a loan transaction by AIIL with Adani Enterprises and APML was also analysed for possible breach of RPT norms.
Further, Sebi has probed transactions involving PMC Projects (India) Pvt Ltd; a transaction between Adani Power Ltd (APL) and Growmore Trade and Investment Ltd; and a loan transaction between Emerging Market Investment DMCC and APL.
In order to assess the fairness and risks of large related party transactions within the group, Sebi investigated transactions between the group’s overseas entities Carmichael Rail and Port Singapore Holdings Pte. Ltd, Adani Mining Pty Ltd and Adani Global Pte Ltd in FY14 and FY15.
Sebi said it has probed dealings by Adani group of companies with NQXT and certain transactions with regards to “awarding coal supply contract to an opaque” Singaporean entity controlled by former Adani Group company director (Pan Asia), and “over-invoicing”.
Adani group’s transactions with Adicorp too were analyzed by the regulator.
To ensure that the group has not breached any corporate governance norms, Sebi has probed a transaction between Vakoder Investments and Adani Estates Pvt. Ltd, and dealings with “Tiny Auditor”.
The regulator said it has examined the audit qualifications in Adani Power Ltd in FY21, and has checked possibilities of insider trading in Adani Power, Ambuja Cements and Adani Green Energy.
To ascertain suspected non-compliance with minimum public shareholding norms, Sebi investigated the group’s filings between 1 April 2016 and 30 September 2020. For this, Sebi said it despatched 1,100 emails, 30 letters, and examined 300 documents running into 12,000 pages. Sebi said its report related to the investigation is interim, since it involves 13 overseas entities, who were classified by the group as public shareholders.
“As many of the entities linked to these foreign investors are located in tax haven jurisdictions, establishing the economic interest shareholders of the 12 FPIs remains a challenge. However, efforts are still being made to gather details from five foreign jurisdictions pertaining to the economic interest shareholders of the FPIs to help Sebi,” said the Sebi submission. FPIs is short for foreign portfolio inestors.
Sebi said it has also made efforts to ascertain allegations of possible material misrepresentation in financial statements, misstatement, attempt to circumvent extant regulations and fraudulent nature of any transactions by listed Adani group firms.
In this context, Sebi said it has conducted 13 investigations relating to transactions including those entered into by Adani group with Adani Infrastructure Management Services; transactions between Krunal and Sunbourne in 2008-09, and subsequent transactions between Sunbourne and Adani Enterprises in FY2019-20.
For the transactions in the group between 1 April 2005 and 31 March 2023, Sebi has issued 1,400 emails, 90 summons for personal appearance and scrutinized 1,850 documents running into 33,550 pages, while taking assistance of external agencies and other regulators.
The regulator has also examined the trading in Adani group firms for both pre- and post-release of the 24 January Hindenburg report.
For this, to ascertain whether the trading pattern (short positions) of certain entities in Adani group of companies was unusual around the time of release of the Hindenburg report, Sebi has examined the trade data between 18 January 2023 and 31 January 2023. Sebi said the report on this investigation is interim as the regulator awaits information from external agencies.
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Updated: 26 Aug 2023, 12:32 AM IST
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