Indian authorities have been investigating companies linked to Gautam Adani, the infrastructure magnate has catapulted to the top ranks of the world’s rich thanks to the low prices of their businesses during the pandemic.
The Adani Group had come under scrutiny following a media report in June that the country’s largest security depository had frozen accounts from three Mauritius-based funds with the majority of its stakes in Adani companies.
In a written response to questions from opposition politician Mahua Moitra on Monday, the state finance minister, Pankaj Choudhary, said the Securities and Exchange Board of India (Sebi) “is investigating some companies of the Adani Group in as for compliance with Sebi regulations ”.
“In addition, the Directorate of Revenue Intelligence (DRI) is investigating certain entities belonging to the Adani Group of Companies under the laws administered by it.”
Sebi declined to comment. Dri did not respond to a request for comment.
Shares in the six listed Adani companies fell Monday afternoon, with Adani Total Gas down 5 percent, the maximum amount allowed by exchange rules.
“While we have always been fully compliant with applicable Sebi regulations, we have made a full disclosure to Sebi on requests for specific information from them in the past,” Adani Group said in a statement. “However, we have not received any requests for communication or information in recent times.”
The group added that the Dri had given a “cause warning show” to Adani Power five years ago regarding the explanation of the team’s assessment. The matter is now being dealt with in a Dri court and is under trial, said a spokesman for the Adani Group.
At its annual meeting this month, Adani complained of “reckless and irresponsible reporting” and said an “intricate narrative” had affected Adani’s actions. Shares in the billionaire companies lost more than $ 20 billion in value in five days in June, according to the news report on Mauritius funds.
Adani has emerged as one of the most powerful magnates of India, expanding his port empire in various sectors at an extraordinary speed. His group embraces gas, energy and mining, and is one of the highest views of Prime Minister Narendra Modi’s green energy priority.
It has invested in airports and data centers, taking control of Mumbai airport from the GVK group this month. The Adani Group currently operates six airports in India, and hopes to capitalize on when the country’s abused tourism sector begins to recover from the pandemic.
Analysts said Sebi needed more information to understand the impact of the investigation. “I think we have to wait, we don’t know what that actually means, Sebi didn’t say anything,” said Deepak Shenoy, founder of Capitalmind’s portfolio manager. “That seems more political than any other.”