Securities and Exchange Board of India (SEBI), the stock markets regulator, informed the Supreme Court on Monday that it is launching an investigation against billionaire Gautam Adani-led Adani Group regarding the allegations made by US-based short-seller Hindenburg Research. The development comes days after the apex court sought a reply from both SEBI and central government regarding the formation of a committee to investigate the Adani Group last week.
Meanwhile, the central government informed the Supreme Court on Monday that it will be forming a committee of domain experts in order to strengthen the regulatory mechanisms of the domestic stock market. The apex court last week proposed to form an expert committee to protect investors’ interest in light of a volatile stock market amidst the decline in Adani Group stocks.
Seven Adani Group listed companies have lost $120 billion in valuation, since the publishing of the Hindenburg Research report.
"The government has no objection to forming a committee. But, the remit of the committee, we can suggest. We can provide names in a sealed cover," Solicitor General Tushar Mehta, who was appearing for both SEBI and the government, told the Supreme Court.
To counter the report by Hindenburg Research, the port-to-green energy conglomerate on Monday roped in accountancy firm Grant Thornton for independent audits of some of its listed companies, according to reports. The accountancy firm will look into compliance by the companies as per corporate governance standards.
Last month, Hindenburg Research alleged that the Gautam Adani-led conglomerate has engaged in a stock manipulation over the course of decades.
Last week, SEBI said it has put in place "a set of well-defined, publicly available surveillance measures" to address excessive volatility in "specific stocks". Earlier, the National Stock Exchange put three Adani Group companies — Adani Enterprises, Adani Ports, and Ambuja Cements under the short-term additional surveillance measure (ASM) framework. The stock exchange's move aims to enhance market integrity and safeguard the interest of investors amid extreme volatility.
The Adani Group this month refunded to its investors the fully-subscribed ₹20,000 follow-on public offer of Adani Enterprises. Adani said the decision to not proceed with the FPO will not have any impact on the conglomerate's existing operations and future plans.