Skip to content
Search AI Powered

Latest Stories

Indian regulator probes Adani's links to investors as Modi's office is briefed

The Securities and Exchange Board of India (SEBI) is looking into any potential violation of Indian securities laws or any conflict of interest in the share sale process, said the two sources who have direct knowledge of the matter.

Indian regulator probes Adani's links to investors as Modi's office is briefed

India's market regulator is investigating Adani Group's links to some of the investors in the conglomerate's aborted $2.5 billion share sale, two sources said, amid growing concern in New Delhi about a U.S. short-sellers allegations against one of the country's top industrial groups.

The Securities and Exchange Board of India (SEBI) is looking into any potential violation of Indian securities laws or any conflict of interest in the share sale process, said the two sources who have direct knowledge of the matter.


The watchdog is investigating relationships between Adani and at least two Mauritius-based firms -- Great International Tusker Fund and Ayushmat Ltd. -- which participated as anchor investors, among others, said the sources, who spoke on the condition of anonymity due to the confidential nature of the probe.

Under India's capital and disclosure requirement rules, any entity related to a company's founder or the founder group is ineligible to apply under the anchor investor category. One of the sources said the focus of the probe would be whether any of the anchor investors are "connected" to the founder group.

The ports-to-energy conglomerate -- controlled by billionaire Gautam Adani, one of the world's richest people -- has seen shares in its seven companies lose more than $100 billion in market value since the Jan. 24 report by Hindenburg Research, which accused it of improper use of offshore tax havens and stock manipulation. Adani has denied the charges. Last week, the group's flagship entity Adani Enterprises ADEL.NS pulled its secondary share offering, India's largest ever, because of the sharp selloff.

SEBI and the Adani Group did not respond to requests for comment about the investigation. Great International Tusker Fund and Ayushmat Ltd. also did not respond to requests for comment.

Also under the SEBI scanner are Elara Capital and Monarch Networth Capital, two of the 10 investment banks that managed the share offering, the sources said, adding that SEBI had approached the two firms last week.

The roles of Elara and Monarch are being examined by the market watchdog to rule out "any conflict" in the share offering process, one of the sources said.

Shares in Adani Enterprises extended their losses to 5% in Friday afternoon trade following Reuters' report, having previously been down 2.5% earlier in the day.

MEETING WITH MODI'S OFFICE

Hindenburg has alleged one Adani private entity had a small ownership stake in Monarch - which has previously worked as a bookrunner for the group - saying "this close relationship seems to pose an obvious conflict of interest." The short-seller also alleged that a Mauritius-based fund of Elara has invested 99% of its market value in three Adani stocks.

Adani has said Monarch was selected for previous share sales "for their credentials and ability to tap into the retail market". On Elara, Adani has said "innuendoes" that the firm was in any manner related to the conglomerate founders were incorrect.

When contacted, Monarch referred Reuters to an exchange disclosure on Feb. 3 that said an Adani entity has held "an insignificant", 0.03%, stake in the company since 2016. Reuters was unable to confirm this from public records. Elara did not respond to a request for comment on the regulator's probe and Hindenburg's allegations.

In recent days, the fallout of the allegations by Hindenburg, which stood to profit from the fall in the value of Adani Group assets, has come up repeatedly as a cause for concern at the national level, including at Prime Minister Narendra Modi's office, two government officials said.

Opposition parties have protested in parliament to call for an independent probe into Hindenburg's allegations.

The federal corporate affairs ministry, responsible for regulating Indian businesses, has briefed officials in Modi's office and been in touch with SEBI, the market regulator, one of the officials said. Reuters could not determine the specific details of these discussions, which have not been previously reported.

The ministry launched a review of Adani's past financial statements on Feb. 2.

Modi's office and India's Ministry of Corporate Affairs did not respond to requests for comment about the regulatory probe into Adani after the publication of the Hindenburg report.

The conglomerate has previously said Hindenburg's allegations of stock manipulation had "no basis" and stemmed from ignorance of Indian law. It has said it has always made the necessary regulatory disclosures. India's Finance Secretary T.V. Somanathan on Saturday described the Adani issue as a "storm in a teacup" from a macroeconomic perspective.

(Reuters)

More For You

uk-snow-getty

People drive their cars past a landscape covered in snow and along the Snake pass road, in the Peak district, northern England. (Photo: Getty Images)

UK records coldest January night in 15 years at -17.3 degrees Celsius

THE UK recorded its coldest January night in 15 years as temperatures dropped to -17.3 degrees Celsius in Altnaharra, Sutherland, by 9 pm on Friday.

This is the lowest January temperature since 2010, when Altnaharra hit -22.3 degrees Celsius on 8 January, The Guardian reported.

Keep ReadingShow less
Chandra Arya

Arya, who represents Nepean in Ottawa and was born in India's Karnataka, made the announcement on X. (Photo: X/@AryaCanada)

Liberal MP Chandra Arya declares bid for prime minister of Canada

CANADA’s Asian MP Chandra Arya has announced his candidacy for the prime ministership, just hours before the Liberal Party confirmed that its next leader will be selected on 9 March.

Arya’s announcement comes days after prime minister Justin Trudeau declared his decision to step down while continuing in office until a new leader is chosen.

Keep ReadingShow less
Exclusive: 'Starmer must fill NHS staffing defecit'
Dr Chaand Nagpaul

Exclusive: 'Starmer must fill NHS staffing defecit'

LABOUR's latest announcement to cut NHS waiting lists, while welcome, does not go far enough, the former leader of the doctors’ union, Chaand Nagpaul has told Eastern Eye.

Prime minister, Sir Keir Starmer, unveiled his plans on Monday (6). He pledged Labour would set up more NHS hubs in community locations in England, and the service would make greater use of the private sector to help meet the challenge.

Keep ReadingShow less
Exclusive: 'Stop spreading racial hatred'
Nazir Afzal

Exclusive: 'Stop spreading racial hatred'

POLITICIANS must dial down “dangerous and inflammatory” rhetoric and recognise the contributions of all communities in Britain, prominent south Asians have told Eastern Eye.

They are concerned that recent social media attacks on asylum seekers, immigrants, especially British Pakistanis, as well as ministers will lead to unnecessary deaths.

Keep ReadingShow less
Lisa-Nandy-Getty

The culture secretary retains powers to refer the case to the Competition and Markets Authority, which could trigger an investigation into press freedom concerns linked to Abu Dhabi’s involvement. (Photo: Getty Images)

Calls grow for Lisa Nandy to end Telegraph ownership stalemate

THE SALE of The Telegraph newspaper has drawn widespread political calls for culture secretary Lisa Nandy to intervene and end the prolonged uncertainty surrounding its ownership.

The newspaper has been in limbo for 20 months after an auction process initiated by RedBird IMI, an Abu Dhabi-backed investment fund, failed to secure a suitable buyer.

Keep ReadingShow less