Two persons said India’s market regulator is probing whether the Adani Group’s interactions with at least three offshore businesses linked to the conglomerate’s founder’s brother violated “related party” transaction regulations.
For 13 years, the three organizations reportedly invested in unlisted businesses of Gautam Adani’s ports-to-power complex.
The two sources stated Gautam Adani’s brother Vinod Adani is either a beneficial owner or director or has links to those three offshore firms. SEBI is investigating if the lack of disclosure violates “related party transaction” laws.
Related parties in India include direct relatives, promoter groups, and listed company subsidiaries.
A promoter group is a significant shareholder that may influence corporate policy.
Such firms must report transactions in regulatory and public filings and obtain shareholder approval over a threshold. Violations usually incur penalties.
SEBI declined to comment. SEBI chairwoman Madhabi Puri Buch denied commenting on the Adani probes at a Wednesday press conference.
An Adani Group spokeswoman stated Vinod Adani is part of the promoter group and the Adani family, but he does not oversee any listed Adani firms or subsidiaries.
“This fact, like all other material information needed to be reported, has been provided to the regulatory authorities in the past and also as and when required,” the spokeswoman said, without addressing the offshore entity examination.
Vinod Adani was unavailable for comment. His Dubai holding firm, Adani Global Investment DMCC, did not reply to response requests.
The examination follows U.S. short-seller Hindenburg Research’s Jan. 24 report claiming tax haven abuse and stock manipulation by Adani Group, which it denies.
Hindenburg’s report shaved $100 billion off Adani Group shares.
In March, India’s Supreme Court ordered SEBI to examine the Adani Group’s public shareholding, a related party, and regulatory disclosure violations.
SEBI’s probe into Adani’s suspected “related party” dealings with offshore businesses linked to Vinod Adani is new.
The two individuals, who requested anonymity because SEBI investigations are confidential, said top regulatory officials will report to a court-appointed panel on Sunday.
Hindenburg’s January investigation claimed that Vinod Adani’s businesses have shifted “billions of dollars” into Adani’s publicly listed and private entities, frequently without disclosing their related party status.
In a 413-page response to the claims, the Adani Group declared all transactions with “associated parties” under Indian law and accounting rules.
Krunal Trade and Investments Ltd, Gardenia Trade and Investments Ltd in Mauritius, and Electrogen Infra in Dubai are Vinod Adani’s offshore firms investigated for “related party” activities.
Krunal, Gardenia, and Electrogen Infra ignored email requests for comment.
Despite sources ‘ claims, Reuters could not identify any firms that may have violated “related party” transaction regulations.
One of the two individuals claimed SEBI suspects “disclosure breaches” on several transactions.
The source claimed it might result in monetary fines and referral to India’s Ministry of Corporate Affairs (MCA) for transactions outside SEBI jurisdiction.
