SEBI probing ‘market allegations’ on Adani Group, says Finance Ministry

Ministry assures Parliamentarians that there will be no systemic impact from volatility in share prices; Ministers note that one DRI investigation has been concluded, another is pending

March 13, 2023 03:49 pm | Updated March 14, 2023 09:23 am IST - New Delhi

SEBI to investigate allegations against Adani group | File photo

SEBI to investigate allegations against Adani group | File photo | Photo Credit: Reuters

Stock market regulator Securities Exchange Board of India (SEBI) is probing “market allegations” against the Adani Group of companies, while the Department of Revenue Intelligence (DRI) has completed investigations in a power equipment imports case involving the group even as another case involving imports of Indonesian coal is held up due to litigation.

The Finance Ministry shared this information in Lok Sabha on Monday through responses to as many as seven questions posed about Adani Group issues by Parliamentarians.

“As per its mandate, [SEBI] conducts investigations into any alleged violations of its Regulations by any market entity. It is, accordingly, undertaking investigation into the market allegations against the Adani Group of companies,” Minister of State for Finance Pankaj Chaudhary said.

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“The nine listed companies forming part of Adani Group witnessed a decline of around 60% of market capitalisation from January 24, 2023, till March 01, 2023, subsequent to the report published by Hindenburg Research. These companies are not part of Sensex and have a combined weight of below 1% in Nifty,” Mr. Chaudhary said, adding that the volatility in these stocks have not had “any significant impact at the systemic level”.

SEBI had told the Supreme Court that it was enquiring into the allegations made against the Adani Group firms in the Hindenburg report as well as the market activity immediately preceding and post the publication of the report, to identify violations. The apex court, in a March 2 order, directed SEBI to conclude its investigations into Adani Group firms within two months.

Finance Minister Nirmala Sitharaman, responding to a query on the loan and credit exposures of public sector financial banks and insurance firms to the Adani Group, said the Reserve Bank of India is prohibited from disclosing credit information submitted by a bank.

“The Life Insurance Corporation of India (LIC) has informed that its debt exposure to Adani Group of Companies… was ₹6,347.32 crore and ₹6,182.64 crore, as on 31.12.2022 and 5.3.2023, respectively. The five Public Sector General Insurance companies have informed that these companies do not have loan/credit exposure to Adani Group of Companies,” Ms. Sitharaman added.

As of March 5, LIC’s highest debt exposure was to Adani Ports and SEZ at ₹5,388.6 crore. Another ₹794 crore of debt relates to two Adani Power projects in Mundra and Maharashtra and another couple of Adani group firms called Raipur Energen Limited and Raigarh Energy Generation Limited.

“Investigations pertaining to imports of Power Generation, Power Transmission and Infrastructure (Port & SEZ) Equipment by Adani Group companies have been concluded by Directorate of Revenue Intelligence (DRI) and report has been submitted before the relevant judicial authorities,” Mr. Chaudhary informed in response to another query.

“As regards case pertaining to imports of Indonesian coal by Adani Group of Companies, investigations by DRI have not reached finality as information sought from exporting countries through execution of Letters Rogatory (LRs) is under litigation,” he added.

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