US regulators looking into Adani Group's representations to investors following Hindenburg findings: Report

The Securities and Exchange Commission (SEC) in the US and the Attorney’s Office in Brooklyn, New York, are looking into the representations made by the Adani Group to its American investors following short-seller Hindenburg's report, a Bloomberg report said. 

Earlier this year, Hindenburg Research submitted a report accusing the Gautam Adani-controlled companies of using offshore companies to manipulate their share prices. The short-seller also flagged concerns about high debt, eroding $11 billion in investor wealth.

The report quoting sources said that the institutional investors with large holdings in the Adani Group have received inquiries from the Attorney’s Office in Brooklyn and SEC asking for information on what the Adani group told the American investors.
SEC has also launched a similar probe in recent months, two other people told Bloomberg.

That said, requests for information from US prosecutors do not necessarily mean that criminal or civil proceedings will be filed as law enforcement agencies often open inquiries that do not lead to action.

A spokesperson for the Adani Group told Bloomberg it was not aware of any subpoenas to investors.

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The Gautam Adani-led Adani Group is already under regulatory scanners in India. The Securities and Exchange Board of India in May had "drawn a blank" in investigations into suspected violations in overseas investments in the Adani Group.

In a court filing, Sebi denied that it ever investigated billionaire Gautam Adani's conglomerate in the past, termed the allegations factually baseless.

Sebi further said that the 'investigation' referred to in the reply affidavit holds no relation to the issues referred to by US-based short-seller Hindenburg in its report.

In addition, a separate Expert Committee said its ongoing pursuit of the case could be a "journey without a destination".

The special panel was set up to inter alia investigate whether there has been a regulatory failure in dealing with the alleged flouting of laws by the Adani Group or other companies.

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