- Wednesday, February 26, 2025
For the first time, the markets regulator will say that the country’s customs authority alerted it about an alleged misuse of offshore funds by Adani Group companies nine years ago.
By: Shubham Ghosh
THE Indian markets regulator was set to tell the country’s apex court the reason for pausing and resuming probe into the Adani Group following a tip in 2014 amid questions over the regulatory delays, two informed sources told Reuters on the condition of anonymity.
For the first time, the Securities and Exchange Board of India (SEBI) will say that the country’s customs authority told it about an alleged misuse of offshore funds by Adani Group companies nine years ago but the initial investigation did not lead to any result and was halted in 2017, the sources added.
The probe was resumed this year after Hindenburg Research, a US-based short-seller, raised governance concerns. Adani Group rejected the allegations.
A public interest litigation told India’s Supreme Court last month that SEBI had concealed the alert it received in 2014, which alleged stock price manipulation using offshore entities.
One of the sources told the regulator went after the allegations following the alert. According to the other source, SEBI sought but failed to get data from foreign jurisdictions between 2014 and 2017.
India’s Directorate of Revenue Intelligence (DRI) also probed.
In the alert to SEBI, DRI had alleged Adani Group companies over-valued equipment and machinery imported from a United Arab Emirates-based entity, as per court documents.
DRI suspected some of the funds that were used in those transactions may have found their way back into the Adani Group’s listed companies, according to a letter from it to SEBI in January 2014, accessed by Reuters.
But a DRI adjudicator dismissed the customs department’s charges three years later, the source said.
“After this, SEBI investigation fell by the wayside,” the source told Reuters.
The Supreme Court is overseeing SEBI’s current probe into the Adani Group.
