NEW DELHI: The Department of Corporate Affairs has begun a preliminary review of Adani Corporationfinancial statements and other regulatory submissions made over the years, two senior government officials told Reuters on Friday.
The Adani Group has denied US-based short-selling firm Hindenburg Research’s allegations of improper use of offshore tax havens and manipulation of securities, saying it “has no basis”. ” and is due to ignorance of Indian law. The group also said it always makes the necessary regulatory disclosures.
The Adani Group is grappling with a stock market downturn as a result of the Hindenburg report on Jan. 24 and this week canceled a $2.5 billion stock sale.
The ministry’s review marks the latest oversight by the Adani Group, but the first by the government in New Delhi.
The market regulator has been investigating the matter, including the collapse of the company’s shares, any irregularities in the sale of shares currently on hold, and any possible price manipulation. out, Reuters reported this week.
One of the government sources said the ministry’s new vetting process was started on Thursday, under “Section 206” of India’s Companies Act, under which the government reviews financial documents. deposited over many years, such as a balance sheet, book of accounts, or general ledger.
“An investigation has been initiated by the (General) Director of Corporate Affairs. The ministry has been closely monitoring the situation and will take appropriate measures promptly,” said the first senior government official. , who has direct knowledge of the proceedings, told Reuters.
A spokesperson for the Adani Group did not immediately respond to a request for comment. The Department of Corporate Affairs, as well as the Office of the Director General, did not respond to Reuters’ requests for comment.
A second government source confirmed the process had begun and would include a review of the company’s corporate governance practices, but declined to elaborate.
Government officials declined to be named due to the confidential nature of the process.
The Section 206 legal provision under the company law also empowers the government to seek further documents from a company as it deems necessary, such as meeting minutes or board resolutions, two other familiar sources. belonging to this process said.
Both houses of Congress were adjourned on Friday amid turmoil as some lawmakers demanded an investigation following the collapse of shares in Adani Group companies, which some feared. fear could cause broader financial turmoil.
The Adani Group has denied US-based short-selling firm Hindenburg Research’s allegations of improper use of offshore tax havens and manipulation of securities, saying it “has no basis”. ” and is due to ignorance of Indian law. The group also said it always makes the necessary regulatory disclosures.
The Adani Group is grappling with a stock market downturn as a result of the Hindenburg report on Jan. 24 and this week canceled a $2.5 billion stock sale.
The ministry’s review marks the latest oversight by the Adani Group, but the first by the government in New Delhi.
The market regulator has been investigating the matter, including the collapse of the company’s shares, any irregularities in the sale of shares currently on hold, and any possible price manipulation. out, Reuters reported this week.
One of the government sources said the ministry’s new vetting process was started on Thursday, under “Section 206” of India’s Companies Act, under which the government reviews financial documents. deposited over many years, such as a balance sheet, book of accounts, or general ledger.
“An investigation has been initiated by the (General) Director of Corporate Affairs. The ministry has been closely monitoring the situation and will take appropriate measures promptly,” said the first senior government official. , who has direct knowledge of the proceedings, told Reuters.
A spokesperson for the Adani Group did not immediately respond to a request for comment. The Department of Corporate Affairs, as well as the Office of the Director General, did not respond to Reuters’ requests for comment.
A second government source confirmed the process had begun and would include a review of the company’s corporate governance practices, but declined to elaborate.
Government officials declined to be named due to the confidential nature of the process.
The Section 206 legal provision under the company law also empowers the government to seek further documents from a company as it deems necessary, such as meeting minutes or board resolutions, two other familiar sources. belonging to this process said.
Both houses of Congress were adjourned on Friday amid turmoil as some lawmakers demanded an investigation following the collapse of shares in Adani Group companies, which some feared. fear could cause broader financial turmoil.
