Jan 27, 2023, 03:32 pm
India’s market regulator has increased scrutiny of deals by the Adani Group over the past year and will study a report issued by short-seller Hindenburg Research to add to its own ongoing preliminary investigation into the group’s foreign portfolio investors, according to two sources aware of the matter.
On Wednesday, the U.S. short-seller said it held short positions in the Indian conglomerate, accusing it of improper use of offshore tax havens and flagging concerns about high debt, leading to a massive sell-off of India-listed shares of the conglomerate's companies.
“SEBI has been increasingly examining all the transactions that Adani Group has been undertaking in the listed space," said the first of the two sources, who declined to be identified as the matter is confidential. SEBI has been increasingly asking for disclosures that it ordinarily does not.
Adani earlier this week dismissed the Hindenburg report as baseless and said it is considering whether to take legal action against the New York-based firm.
SEBI spokespersons did not offer any immediate comments saying they do not discuss company specific matters and ongoing probes.
In the case of Adani Group’s acquisition of Switzerland-based Holcim Ltd's stake in India's Ambuja Cements Ltd and ACC Ltd, the regulator examined the offshore special purpose vehicle (SPV) used for the transaction, the first source said.
The use of this SPV was disclosed by the group as part of the acquisition announcement in May 2022. The regulator had found as many as 17 foreign offshore entities involved in the funding of the transaction.