New Delhi: Six companies within the Adani Group have announced that they’ve received show cause notices from India’s market regulator, the Securities and Exchange Board of India (Sebi), company mentioned in their recent filings with the stock exchanges, as per Economic Times. These notices were issued due to alleged violations related to party transactions and non-compliance with listing regulations.
Adani Enterprises has announced that it received two show-cause notices in the quarter ending March 31, as per report. Other Adani Group companies such as Adani Ports & Special Economic Zone, Adani Power, Adani Energy Solutions, Adani Wilmar and Adani Total Gas have also disclosed that they received show-cause notices from the Securities and Exchange Board of India (Sebi). (Also Read: Raymond Re-appoints Gautam Singhania As MD Amid Divorce Settlement Dispute)
However, the firm said that based on the legal advice they have received they do not expect these notices to have an impact. The auditors for most of these firms except for Adani Total and Adani Wilmar issued a qualified opinion. This means the auditors have some concerns that could potentially affect the financial statements in the future. (Also Read: Meet Indian-Origin Business Leader Who Became One of America's Wealthiest Women And Built Rs 78,000 Crore Company)
"The allegations are that the company has not obtained the requisite approvals, and have not made the required disclosure in the financial statements/ annual report. Not recalling security deposits against terminated contracts leading to not using the funds for company's core business purposes and thus not complying with the company's code of conduct," Adani Ports and SEZ mentioned this information in its disclosures.
The Securities and Exchange Board of India (SEBI) notices are part of an investigation sparked by serious allegations from U.S. short-seller Hindenburg Research. In January 2023, Hindenburg accused the Adani Group of corporate fraud and manipulating stock prices. While Adani strongly denied all claims the accusations led to a drop in their stock values.
