The Centre is keeping close tabs on the evolving situation surrounding the Adani Group of companies, but is not looking at initiating a full-fledged official probe anytime soon, according to official sources. It will wait until the Securities and Exchange Board of India (Sebi) shares its findings after its ongoing examination of the concerns that have emerged in this regard, they added.
The ministry of finance as well as the ministry of corporate affairs are keeping themselves apprised of all the issues surrounding the Adani Group companies, said one of the sources privy to the developments. “Like in the case of any large corporate entity, the issue is being monitored at the highest levels. The regulators are already looking into the questions being raised but a full-fledged investigation by the government ministries is unlikely for now,” the source said, requesting not to be quoted.
“Financial sector entities and public money invested in these firms remains protected as of now,” another official said, requesting not to be quoted. “But we are keeping ourselves abreast of the situation as it evolves, because it may have repercussions on regulatory compliances that fall in the ministries’ domains, whether it relates to revenue or forex flows or company law-related concerns,” he added.
Meanwhile, Union home minister Amit Shah told news agency ANI on Tuesday that the ruling BJP has “nothing to hide or be afraid of” on the controversy over Adani group. He was responding to opposition allegations of the ruling dispensation having favoured the conglomerate, which saw a phenomenal rise in size, spread and market cap in a relatively short period. “The Supreme Court has taken cognisance of the matter. As a minister, if the Supreme Court is seized of the matter, it is not right for me to comment,” Shah said.
The Adani Group stocks have been seeing a meltdown after US-based short selling firm Hindenburg Research made a slew of allegations in a report, including fraudulent transactions and stock manipulations by the group. The group’s shares have lost over $120 billion in market value since the report was released on January 24.
Adani Enterprises also decided to withdraw its `20,000-crore follow-on public offer (FPO), which scraped through on the final day of the issue. The firm said it will refund the money received from investors who had forked out the offer price though it was higher than the firm’s current market price at the time, to see the share sale through.
The Sebi, as per its 22-page submission to the Supreme Court on Monday, is probing the allegations made against the Adani Group by Hindenburg Research, as well as the market activity immediately before and after the Hindenburg report’s publication to identify violations of its market regulations.
Last Saturday, finance minister Nirmala Sitharaman had stressed that India’s regulators are very experienced and are seized of the matter. Previously, the minister had also said that the country’s macroeconomic fundamentals are strong and are not affected by the withdrawal of FPO by the Adani group.
The government and Sebi, through the Solicitor General, also conveyed to the Supreme Court on Monday that they have no objection to its proposal to set up a panel of domain experts to examine the regulatory mechanisms for stock markets to protect investors from the kind of sudden battering that has afflicted Adani group’s stocks in recent weeks.
However, they have both requested the Court to allow them to suggest the remit of such a committee and possible members that could be included in the panel. The Centre is expected to submit the proposed remit of the expert panel in the Supreme Court on Friday.