According to a court file obtained by Reuters, India’s markets regulator notified the country’s highest court on Monday that it was investigating charges made against the Adani Group by U.S.-based short seller Hindenburg Research in a damning report.
The Securities and Exchange Board of India (SEBI) also stated that it was investigating market behaviour just before and after Hindenburg issued its report on January 24, according to the document.
Adani Group’s seven listed firms, led by billionaire Gautam Adani, have together lost almost $120 billion in market value since Hindenburg’s damning report, which included charges of inappropriate use of offshore tax havens and stock manipulation. Adani Group has disputed the allegations.
Earlier on Monday, Adani Group attempted to reassure investors by stating that its business plans were fully funded, its cashflows were robust, and it was confident of providing excellent returns to shareholders.
SEBI has been investigating trade patterns and potential irregularities in Adani Enterprises’ $2.5 billion share offering, which the Adani group was forced to postpone owing to a drop in its shares, according to Reuters, citing sources.
In its Supreme Court brief, SEBI disclosed the existence of the inquiry for the first time.
“SEBI is already enquiring into both the allegations made in the Hindenburg report as well as the market activity immediately preceding and following the publication of the report,” the regulator said in the filing, adding the matter was in the early stages of examination.
“SEBI is strongly and adequately empowered to put in place regulatory frameworks for effecting stable operations and the development of the securities markets,” it added.
In its Supreme Court brief, SEBI disclosed the existence of the inquiry for the first time.
SEBI’s Supreme Court submission was in response to two different public interest lawsuits that expressed concerns about investor safety during market volatility induced by the short seller’s report.
According to SEBI, the events at the heart of these instances involved “one group of companies in the market and had no major influence at the systemic level.”
“The entity-level concerns that have developed have had a major impact at the entity level and merit comprehensive consideration by the regulator,” according to the submission.
