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India’s markets regulator SEBI has confirmed that it is looking into the claims made by Hindenburg Research against Adani Group of companies owned by multibillionaire Gautam Adani.
The Securities and Exchange Board of India (SEBI) also looks into how the report is affecting the market.
After accusations of market manipulation and financial fraud, Mr. Adani’s business empire lost more than $100bn (£82.3bn) in value on the stock market.
Adani Group says that the claims are false.
Monday, SEBI told the Supreme Court in a document that it was looking into the claims and “activity before and after the report was published.”
But Adani group did tell Reuters that it had strong cash flows and that its business plans were fully funded.
Adani Enterprises, the biggest company in the group, reported a net profit of nearly $100 million from October to December, compared to a loss of $1.5 million for the same quarter last year.
Its total income went up by 42% to $3.3 billion because its airports, coal trading, and new energy businesses did well.
The company didn’t announce any changes to its growth or investment plans. It didn’t say anything about France’s TotalEnergies’ decision to stop working with Adani on a green hydrogen project after the Hindenburg report came out.
Shares of Adani Enterprises went up 5% on Mumbai’s stock exchange after falling nearly 50% in the past month.
Adani group comprises seven publicly traded companies that work in various fields, such as trading commodities, airports, utilities, ports, and renewable energy.
Last month, a US-based short-seller named Hindenburg Research said that Adani Group companies had been manipulating their stock prices and lying about their finances for decades.
It also said that its companies had “substantial debt,” which made the whole group “financially unstable.”
When you short-sell, you bet an asset’s price will go down.
Adani Group has said that the claims are completely false. It had been said before, without evidence, that the Hindenburg report was made to help the US-based short seller make money.
Allegations of fraud against the Adani Group start a political fight in India
The claims of fraud against the business empire of billionaire Gautam Adani by a US research firm have caused a political fight in India.
Friday was the second day in a row that opposition leaders stopped the parliament from working. They did this because they wanted an investigation into the claims.
Last week, a research firm said that Adani Group firms had manipulated their stock prices and committed financial fraud. This caused its shares to drop sharply.
Adani group has come out to say the claims are not true.
Both houses of India’s parliament had to stop their morning sessions on Friday because opposition leaders asked for an investigation.
They have asked for a Joint Parliamentary Committee or a panel overseen by the Supreme Court to be set up to look into the claims against the company and the risk that the fall in Adani company shares poses to Indian investors.
In the last few days, the market value of the companies in the Adani Group has dropped by $108bn. This is because an investment firm in the US called Hindenburg Research published a report that accused the Adani Group of decades of “brazen” stock manipulation and accounting fraud.
The group has said that the accusations are false and made with bad intentions. They have called them an “attack on India.” But the answer hasn’t stopped Adani’s shares from going down.
The founder, Gautam Adani, has dropped out of the top 10 wealthiest people in the world. Forbes’ real-time list of billionaires says that Mr. Adani is now the 15th richest person in the world, with a net worth of about $74.7bn. Last week, he was third on the list.
One of India’s largest companies, Adani Group, is run by a billionaire. Adani Enterprises is the main company. It works in various fields, such as commodities trading, airports, utilities, and renewable energy.
Thursday, opposition lawmakers also got in the way of parliamentary business after the government turned down their requests to stop work so they could talk about the Adani issue.
The leader of the main opposition party, the Congress party, Mallikarjun Kharge, said, “There should also be day-to-day reports on the investigation into this matter.”
The Congress has also said that the government is putting people’s savings at risk by forcing the government-owned State Bank of India (SBI) and the state-owned Life Insurance Corporation of India (LIC) to invest in the firm.
But on Friday, Nirmala Sitharaman, India’s finance minister, said that the exposure of LIC and SBI to the Adani group was within the permitted limits. She did this by citing earlier statements made by SBI and LIC.
She added that India’s financial market was “well-regulated” and that investors wouldn’t lose faith.
The Congress has also said that there will be protests across the country on Monday outside the offices of companies in the Adani Group, banks that the government took over, and public institutions.
Read Also: Adani Group: Can the embattled tycoon recover?
The leader of the party, KC Venugopal, has said that the BJP-led government is “using the money of ordinary people to help their closest friends.”
People think that Mr. Adani is close to Prime Minister Narendra Modi. Opposition politicians have long said he has profited from his political ties, which he denies.
