Indian regulators have rejected settlement offers from several offshore funds that hold investments in Adani Group companies. These funds were identified in a 2023 Hindenburg Research report that alleged governance concerns within the conglomerate. The Securities and Exchange Board of India (SEBI) had launched an inquiry following the report, and its investigation uncovered violations related to disclosure rules by Adani Group entities and limits on holdings by offshore funds. The rejections suggest a tougher stance by Indian authorities on compliance.
The offshore funds had initially appealed SEBI's probe findings before the Securities Appellate Tribunal (SAT) but later withdrew their pleas, indicating an intent to refile them after addressing SEBI's objections. Sources familiar with the matter characterized the violations as "technical" in nature, suggesting that they would likely result in monetary penalties rather than more severe actions once the investigation concludes. The Supreme Court of India is currently overseeing SEBI's investigation into the Adani Group.
This development comes amidst other legal and regulatory challenges for the Adani Group. Adani Enterprises Ltd. recently agreed to a $275 million settlement with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) regarding purchases of liquefied petroleum gas that originated from Iran. Furthermore, a U.S. judge dismissed a bribery case against Gautam Adani, although the judge noted "irregularities" in the Department of Justice's handling of the dismissal. The Securities and Exchange Commission had earlier settled a civil case against Gautam Adani and his nephew, Sagar Adani, involving $18 million in fines for bribery charges.
