The Securities and Exchange Board of India (SEBI) has delayed the settlement pleas of the Adani Group and its offshore investors as it undergoes an internal review of its processes. This decision comes amidst SEBI’s investigation into allegations of stock manipulation and improper use of tax havens by the Adani Group, which were first raised by U.S.-based short-seller Hindenburg Research in 2023. The allegations led to a significant sell-off in Adani Group shares, although they have since recovered.
SEBI’s review, initiated under its new chief who took charge in March, aims to address inconsistencies in the settlement process and unclear penalty guidelines. The review is expected to take three months, after which the Adani Group’s settlement applications will be reconsidered under revised procedures. The regulator is investigating 24 charges against Adani Group companies and related entities, including the misclassification of certain shareholders as public, which violates Indian laws requiring at least 25% of a listed company’s shares to be held by public shareholders.
Thirty Adani Group entities have applied to settle some of these regulatory charges, proposing monetary fines without admitting or denying guilt. However, SEBI has indicated that the group may need to reclassify certain shareholdings to proceed with the settlement. Additionally, offshore funds invested in Adani Group companies have been charged with breaching disclosure rules and investment limits.
The delay in settlement pleas adds to the regulatory uncertainty surrounding the Adani Group, which is also facing scrutiny from U.S. authorities over allegations of bribery and misleading investors. The outcome of SEBI’s review and subsequent actions will be closely watched by investors and market participants.
