Adani Group's settlement requests on hold as SEBI reviews procedures
What's the story
The Securities and Exchange Board of India (SEBI) has put on hold the settlement requests of the Adani Group and its foreign investors, pending an internal procedure review, as per Reuters.
The review by SEBI was triggered by inconsistencies in the settlement process and ambiguous rules regarding penalties.
The checking could take up to three months. Once done, the Adani Group's requests will be taken up under these new procedures.
Procedure
Settlement process explained
SEBI's settlement process permits investors and market participants to pay a monetary penalty or agree to regulatory directives without admitting or denying guilt. The status of investigations and requests remains confidential.
Regulatory scrutiny
SEBI's investigation into Adani Group
SEBI launched an investigation into the Adani Group in 2023 after US-based short-seller Hindenburg accused the conglomerate of improper use of tax havens and stock manipulation.
This resulted in a $150 billion sell-off even as the conglomerate denied any wrongdoing.
The group's shares have since recovered. However, Gautam Adani and top executives of Adani Green are also facing indictment by US authorities, for allegedly paying bribes to secure Indian power supply contracts and misleading investors during fund raises.
Action
SEBI's charges against Adani
In India, SEBI is probing 24 charges against Adani Group companies and their foreign investors. Thirty Adani group entities have applied to settle some of these regulatory charges.
Among over 300 pending applications, the Adani Group is the most high-profile settlement application under review.
SEBI had accused Adani Enterprises, Adani Ports, Adani Energy, and Adani Power of misclassifying certain shareholders as public in their financial statements.
Claim
Allegations of incorrect classification of shareholdings
Further, 26 other Adani Group and related entities have been accused of classifying shareholdings by three Mauritius-based offshore funds, as public.
The funds are linked to Vinod Adani, the brother of Gautam Adani.
Under Indian law, at least 25% of a listed company's shares have to be held by public shareholders.