India’s market regulator has increased scrutiny of Adani Group’s deals over the past year and will study a report issued by short seller Hindenburg Research to add to its own ongoing preliminary investigation into the group’s foreign portfolio investors. , according to two sources familiar with the situation. to import.
On Wednesday, the US short seller said it was short the Indian conglomerate, accusing it of misusing offshore tax havens and pointing to concerns about high debt, leading to a sell-off in shares of the companies. of the conglomerate listed in India. .
“SEBI has been increasingly looking into all the transactions that the Adani Group has been conducting in the listed space,” said the first of the two sources, who declined to be named because the matter is confidential. SEBI has been asking for more and more disclosures which is normally not.
Email inquiries and phone calls to Adani Group were not responded to.
Adani earlier this week dismissed the Hindenburg report as baseless and said he is considering legal action against the New York-based firm.
SEBI spokespersons had no immediate comment, saying they do not discuss company-specific matters or ongoing investigations.
In the case of Adani Group’s acquisition of Swiss-based Holcim Ltd’s stake in India’s Ambuja Cements Ltd and ACC Ltd, the regulator examined the offshore special purpose vehicle (SPV) used for the transaction, the first source said.
The group disclosed the use of this SPV as part of the acquisition announcement in May 2022. The regulator had found as many as 17 foreign offshore entities involved in financing the transaction.
The regulator had sought clarity from the group on these entities when the group approached it for regulatory clearance last year. These answers are under regulatory scrutiny, the sources said.
Hindenburg’s report on the Adani group comes amid a $2.45 billion non-core share sale by the group’s flagship company, Adani Enterprises. On Friday, shares of Adani Enterprises fell below the price at which the shares are offered as part of the issue.
In July, the regulator launched an investigation of little-known Mauritius-based offshore funds that held large stakes in the Adani Group’s listed companies, potentially raising concerns about share price manipulation.
At that time, the regulator’s investigation hit a wall due to the lack of information on the jurisdictions where these funds were domiciled.
Some issues raised in the Hindenburg report point to concerns similar to those the regulator had regarding the movement of funds between Adani Group-related parties through offshore funds back to local companies, the sources said.