US authorities are looking into what representations the Adani group made to its American investors following a scathing short seller’s report that accused the company of using offshore companies to secretly manipulate its share prices.
News of such an inquiry on Friday sent Adani group shares tumbling on the stock exchanges, led by Adani Enterprises. The flagship cracked 6.79 per cent at Rs 2,233.10 on the BSE after plummeting 9.72 per cent during intra-day trades to hit a low of Rs 2,162.85.
The red ticks in the Adani group shares came after Bloomberg reported that the US attorney’s office in Brooklyn, New York, has sent inquiries in recent months to institutional investors with large holdings in the conglomerate.
It added that the requests for information were focused on what the Adani group officials told the investors.
The report said the US Securities and Exchange Commission is also carrying out a similar probe.
The requests for information from US prosecutors do not necessarily mean that criminal or civil proceedings will be filed since law enforcement agencies often open inquiries that don’t lead to action.
Reacting to the report, a spokesperson from the Adani group said that it is not aware of any subpoena to investors.
“Adani operates a robust corporate governance framework and is strongly committed to following all laws and regulations in all of its different markets.
“We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which they operate.
“We are not aware of any such subpoena to investors. Our various issuers groups remain confident that the disclosures are full and complete as disclosed in the relevant issuer offering circulars,’’ the spokesperson said.
``We request the media to avoid needless speculation at this time and wait for Sebi and the Supreme Court to complete their work and submit their findings,’’ the spokesperson added.
In the aftermath of the Hindenburg report, the conglomerate held roadshows in Singapore, Hong Kong, Dubai, London and the US in February and March in a bid to reassure fixed-income investors about its finances even as it rejected the allegations made by US short-seller Hindenburg. The reported inquiry by the US authorities now may be on the presentations made by the group.
Reacting to the media report, Nate Anderson, the founder of Hindenburg, said in a tweet that the probe by the US SEC and the Department of Justice is a ``major development’’.
Back home, the Securities and Exchange Board of India (Sebi) is probing Hindenburg’s allegations of stock price manipulation as per the direction of the Supreme Court.
The regulator has been told by the apex court to submit the results of its probe on August 14.
Recently, a report by the Supreme Court-appointed expert committee said it has found no evidence of stock price manipulation in Adani group companies.
The Supreme Court had on March 2 constituted the expert committee to investigate if there was any failure to disclose transactions with related parties and if stock prices were manipulated.
Stocks tumble
Among other group stocks, Adani Ports fell 4.16 per cent, NDTV slumped 3.46 per cent, ACC declined 3.46 per cent, Adani Wilmar skidded 3.42 per cent, Adani Total Gas went lower by 3.21 per cent and Adani Green Energy dipped 1.50 per cent.
In the equity market, the 30-share BSE Sensex fell 259.52 points or 0.41 per cent to settle at 62979.37.
Data centres
AdaniConneX, a JV between Adani Enterprises and EdgeConneX (ECX), has secured a $213 million debt facility for its under-construction data centre asset portfolio.
The facility will finance two data centres with an aggregate capacity of 67 MW that includes ‘‘Chennai 1” campus with Phase-1 of 17 MW, and Noida campus of 50 MW.
“AdaniConneX achieved financial closure through its maiden construction facility by entering into financing framework, raising $213 million for its under-construction data centre asset portfolio,” a statement said.
