India’s markets watchdog SEBI has confirmed that it is looking into the claims made by Hindenburg Research against companies owned by billionaire Gautam Adani.
SEBI also looks at how the report affects the market.
The value of Mr. Adani’s business empire dropped by more than $100bn (£82.3bn) after he was accused of market manipulation and financial fraud.
Adani Group says that the claims are false.
SEBI said it looked into the claims and “activity before and after the report was published” in a document sent to the Supreme Court on Monday.
But the group told Reuters that its cash flow was good and that it had enough money to fully fund its business plans.
The biggest company in the group, Adani Enterprises, made a net profit of nearly $100 million from October to December. This is a big difference from last year, when it lost $1.5 million.
Its total income rose by 42% to $3.3 billion because its airports, coal trading, and new energy businesses did well.
The company didn’t say anything different about its plans for growth or investments. It didn’t say anything about how TotalEnergies stopped 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 dropping nearly 50% in the past month.
Mr. Adani’s group comprises seven publicly traded companies that work in different areas, such as trading commodities, airports, utilities, ports, and renewable energy.
Last month, a short-seller from the US 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 the group was “financially unstable” because its companies had “substantial debt.”
When you short-sell, you bet an asset’s price will fall.
Adani Group says that the claims are not true at all. People had said before, without proof, that the Hindenburg report was made to help the US-based short seller make money.
Heidenburg’s charges against Adani Group in start a political fight in India
A US research firm’s claims that billionaire Gautam Adani’s business empire is full of fraud have caused a political fight in India.
Friday was the second day in a row that leaders of the opposition stopped the parliament from doing its work. They did this because they wanted the claims to be looked into.
Last week, a research company said that Adani Group companies had rigged the prices of their stocks and committed financial fraud. This made its stock fall sharply.
The group said that the claims were not true.
Friday morning, both houses of India’s parliament had to stop 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 drop in Adani company shares poses to Indian investors.
The market value of the companies in the Adani Group has dropped by $108bn in the last few days. This is because an investment firm in the US called Hindenburg Research put out a report that accused the Adani Group of “brazen” stock manipulation and accounting fraud for decades.
The group said that the accusations were false and made with bad intentions. They have said that these plans are an “attack on India.” But that hasn’t stopped Adani’s stock price from falling.
Gautam Adani, the company’s founder, is no longer one of the ten richest people in the world. Forbes’s 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. He was number three on the list last week.
A billionaire runs Adani Group, one of India’s biggest companies. The main company is Adani Enterprises. It works in many different areas, like trading commodities, airports, utilities, and clean energy.
Thursday, opposition lawmakers also got in the way of parliamentary business because the government wouldn’t let them stop working so they could talk about the Adani issue.
Mallikarjun Kharge, the leader of the Congress party, which is the main opposition party, said, “There should also be daily reports on the investigation into this matter.”
The Congress has also said that 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, the government is putting people’s savings at risk.
But India’s finance minister, Nirmala Sitharaman, said on Friday that LIC and SBI were not too close to the Adani group. She did this by mentioning things SBI and LIC had previously said.
She added that India’s financial market was “properly regulated” and that investors wouldn’t lose faith.
The Congress has also said that there will be protests all over the country on Monday outside the offices of companies in the Adani Group, banks that the government took over, and public institutions.
The leader of the party, KC Venugopal, said that the BJP-led government is “using the money of regular people to help their closest friends.”
Read Also: Can Adani Group recover its losses?
People think Mr. Adani is close to Narendra Modi, the Prime Minister of India. Opposition politicians have said for a long time that he had used his political connections to make money, which he denies.