The scope of Adani’s investigation increased, SEBI probed bank accounts

In response to a Public Interest Litigation (PIL) petition, the Supreme Court directed SEBI to investigate the business activities of the Adani Group. The PIL followed a January 24 report by US-based short-seller Hindenburg Research alleging accounting fraud and stock manipulation by the Gautam Adani-led group.

The Hindenburg report, which the Adani group dismissed as baseless, resulted in a drop of $145 billion in the market value of the group’s listed companies as of 26 February.

“With regard to the investigation relating to 12 suspicious transactions (alleged by the Hindenburg Report), prima facie, it is found that these transactions are complex,” Sebi said. This analysis will involve detailed examination of the bank statements of the entities concerned. for the relevant period. (The period of the charges is more than 10 years).”

While shares of listed Adani group firms remain under pressure, SEBI has suspended seven major listed firms of the Adani group – Adani Enterprises Ltd, Adani Power, Adani Transmission, Adani Green Energy, Adani Ports and Adani Ports – between February 12 and April 22. Sent many questions. Special Economic Zones, Adani Total Gas and Adani Wilmar.

Based on its findings so far, Sebi said it has formed a “prima facie” view on the allegations made by Hindenburg in connection with 12 suspicious transactions by the Adani group, which range from financial misrepresentation, fraud to regulations. and for potential violations related to the fraudulent nature of the transaction.

Sebi, however, said detailed investigation of the 12 suspicious transactions will take time as they are complex and have multiple sub-transactions.

In order to complete its probe, SEBI has sought copies of “loans”, “entities involved in the transaction”, “extracts of bank statements”, and “evidence of repayment of loans availed, if any, along with bank’s copies”. Along with details” related documents have been sought. Statements showing such payments allegedly involved in (12 suspected) transactions from seven Adani Group firms, their subsidiaries, step-down subsidiaries as well as other private entities.

Sebi is faced with the uphill task of digging into a complex maze of transactions involving Adani group firms, which were carried out over a period of more than 10 years.

The top court has tasked SEBI to determine whether there has been any violation of securities laws, failure to disclose related party transactions (RPTs), or manipulation of stock prices.

In its latest application, Sebi has said that given the importance of the Adani-Hindenburg case, such an in-depth probe usually takes more than 15 months, it would speed up the investigation, but at least six months to conclude. It will take months more. It added that the probe would involve obtaining and examining “massive bank details” from several domestic and international banks for all transactions carried out for more than 10 years.