India’s market regulator is scrutinizing at least three companies controlled by billionaire businessman Gautam Adani for alleged breaches of securities laws related to prevention of insider trading and inadequate disclosures, two people familiar with the probe said.
“The scope of the scrutiny is to ensure no insider traded unfairly and, secondly, the disclosures have been made adequately and in a timely manner so that public shareholders are protected from unwarranted risks,” said one of the two people on condition of anonymity.
On May 21, group founder Gautam Adani’s net worth touched $74.9 billion, winning him the tag of Asia’s second-richest man led by a massive rally in various Adani Group companies. The group’s market capitalization, however, fell sharply after it emerged that National Securities Depository Ltd locked the accounts of three Mauritius-based funds with large exposures to the Adani Group over lack of disclosures pertaining to end-beneficiaries.
The Securities and Exchange Board of India (Sebi) is looking at whether Adani Ports, Adani Group’s transmission businesses and Adani Gas have made the required disclosures, the first person said.
“Sebi will examine if any unpublished price sensitive information (UPSI) has been misused for any potential insider trading in the stocks of the aforementioned companies either to influence the prices or to make unfair gains,” the person added.
The regulator is also scrutinizing related-party transactions within the group to ensure companies have made adequate and timely disclosures, the people said, requesting their names not be disclosed. On Monday, junior finance minister Pankaj Choudhary said in response to a query in Parliament that Sebi is probing certain group firms for non-compliance.