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Adani companies under SEBI, DRI probe: Minister informs Lok Sabha

Probe against non-compliance to rules; exact date of launch of probe not clear

Gautam-Adanin-reuters [File] Gautam Adani | Reuters

Pankaj Chaudhary, minister of state for finance, on Monday informed Parliament that  the Securities and Exchange Board of India (SEBI) and the Directorate of Revenue Intelligence (DRI) are probing Adani Group companies for non-compliance to rules. However, it was not clear when the investigation was launched by the regulators. 

"SEBI is investigating some Adani Group companies with regard to compliance with SEBI Regulations. Further, the Directorate of Revenue Intelligence (DRI) is investigating certain entities belonging to the Adani Group," Chaudhary stated in Lok Sabha on the first day of the monsoon session. 

The stocks of Adani Group companies have been on a downward spiral ever since a report by The Economic Times said that the National Securities Depository Ltd (NSDL), India's securities depository, has frozen the accounts of three foreign funds—Albula Investment Fund, Cresta Fund and APMS Investment Fund—which together own over Rs 43,500 crore worth of shares in four Adani Group companies. As a result, the funds would not be able to sell any of the existing securities nor buy any new securities. 

The report said, citing an official, that the NSDL's move could be because of insufficient disclosure of information regarding beneficial ownership as per the Prevention of Money Laundering Act (PMLA). Typically, the accounts are frozen if the clients do not take any action despite being notified. 

Following the report, shares of Adani Group companies plummeted from as high as a 1000 per cent rise gained in over a year. After the explosive report on June 14, the shares of six Adani companies have fallen between 12.9-44.9 per cent. 

“We have always been transparent with all our regulators and have full faith in them. While we have always been fully compliant with applicable SEBI regulations, we have made full disclosure to SEBI on specific information requests from them in the past. However, we have not received any communication or information requests recently. With regard to DRI matter, it issued a show cause notice to Adani Power, about 5 years back. Subsequently, DRI passed an order in favour of Adani Power confirming that there is no over-valuation of equipment. The department has approached the Tribunal and the matter stands sub judice now," the company said in a statement.




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