Sources reveal that the US Attorney’s Office in Brooklyn, New York, has taken an active interest in this matter. In recent months, they have sent inquiries to institutional investors who hold significant stakes in the Indian conglomerate. The focus of these inquiries centers on the information conveyed by the Adani Group to these investors. Notably, the Securities and Exchange Commission is also concurrently conducting a similar investigation.
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In a stunning turn of events, Adani Group stocks were thrust into the spotlight, experiencing a substantial decline of up to 10% during Friday’s trade. The cause of this downturn can be traced back to a thought-provoking Bloomberg report, which suggests that US authorities are currently scrutinizing the representations made by the Adani Group to its American investors. This investigation follows Hindenburg Research’s scathing report, which accused the conglomerate of clandestinely manipulating its share prices through the use of offshore companies.
Adani Enterprises, bearing the brunt of the market’s response, witnessed a significant drop of 10%, settling at Rs 2,162.8 on BSE. Other entities within the Adani Group, namely Adani Ports, Adani Power, and Adani Transmission, also suffered a decline of over 5%. Additionally, Adani Total Gas, Adani Green Energy, and Adani Wilmar experienced a substantial plunge of more than 3%, while Adani Wilmar alone saw a decline exceeding 2%.
Sources reveal that the US Attorney’s Office in Brooklyn, New York, has taken an active interest in this matter. In recent months, they have sent inquiries to institutional investors who hold significant stakes in the Indian conglomerate. The focus of these inquiries centers on the information conveyed by the Adani Group to these investors. Notably, the Securities and Exchange Commission is also concurrently conducting a similar investigation.
It is essential to recognize that inquiries from US prosecutors do not automatically indicate the commencement of criminal or civil proceedings. Law enforcement agencies often initiate inquiries that may not necessarily result in subsequent action. In response to these reports, a spokesperson for the Adani Group, headquartered in Ahmedabad, India, stated that the group had no knowledge of any subpoenas issued to investors.
The spokesperson further asserted, “Our various issuers’ groups remain confident that the disclosures are full and complete as disclosed in the relevant issuer offering circulars.” This confident stance echoes the group’s consistent denial of the accusations made by Hindenburg Research. From the group’s perspective, Hindenburg’s report amounted to nothing more than a calculated securities fraud.
Earlier this year, in January 2023, Hindenburg Research released its damning report, which levied accusations against the Adani Group. The report unveiled the alleged utilization of a network of offshore companies situated in tax havens, aiming to embellish share prices and financial results. Moreover, the report accused the conglomerate of disregarding disclosure and shareholding laws. The Adani Group has consistently refuted these claims, vehemently denying any wrongdoing.
The unfolding situation surrounding the Adani Group’s stocks has created an aura of uncertainty and unease, leaving investors and market observers with numerous unanswered questions. As this investigation progresses, it remains to be seen how it will impact the future trajectory of the Adani Group and the wider financial landscape in which it operates.
