This week, Adani group’s listed companies witnessed a huge fall in Friday’s trading session, losing a cumulative market capitalisation of over Rs 52,000 crore which is another severe capital breakdown in over four months. Earlier this year, it had lost more than Rs 59,000 crore, after the declaration of a report by short-seller Hindenburg Research on 24 January 2023, which accused the Adani group of involvement in long-term stock manipulation and accounting fraud through a network of offshore entities.
The US attorney’s office in Brooklyn, New York has led an investigation which targeted the institutional investors with large holdings in the Indian Conglomerate of Adani Group after Hindenburg Research released its report accusing the conglomerate of stock manipulation and accounting fraud. The Securities and Exchange Commission (SEC) is also inquiring similarly as per the sources available.
Nate Anderson, the founder of the Hindenburg research shared Bloomberg’s report and mentioned in twitter, “Major development: The U.S Department of Justice and the SEC are probing Adani. Both agencies are said to be scrutinizing Adani’s disclosures to investors”.
This inspection from US authorities augments the present regulatory investigations being faced by the Gautam Adani-led Adani Group in India.The scrutiny by US authorities comes while Indian Prime Minister Narendra Modi visits the US.
A representative for the Adani Group expressed that they were not aware of any summons issued to investors. The Adani group disagreed to accept the accusations made by the research firm and managed that their disclosures were comprehensive and appropriate. while they refused the accusations made by the short seller. Adani Group’s spokesperson said that, their different issuers groups are confident that the disclosures are full and complete as revealed in the relevant issuer offering circulars .
The declaration of the report led to a serious downturn in Adani Group’s share prices, resulting in a substantial loss of market value, regardless of the group’s strong denial of the accusations,the stocks wiped out the combined market value of Adani Group’s 10 publicly traded businesses as much as $153 billion off
Law enforcement agencies often scrutinize those that do not necessarily open on to legal action. The ongoing probe by the US attorney’s office and the SEC identifies the solemnity with which authorities are proceeding the accusation against the Adani group. After all, it is significant to note that requests for information from prosecutors do not assure the initiation of criminal or civil proceedings.The outcome of the US investigations will likely have far-reaching involvement for the Adani group’s reputation and future dealings with American investors.
