The Securities and Exchange Board of India (SEBI) will investigate allegations of disclosure violations following an indictment filed by the Department of Justice (DOJ) and the US Attorney for the Eastern District of New York, according to sources.
"SEBI will take action if any disclosure violation is found. However, other allegations of bribery fall outside the regulator’s jurisdiction," said sources familiar with the matter.
The indictment alleges that FBI agents raided the premises of Sagar Adani, Executive Director of Adani Green and nephew of Gautam Adani, on 17 March 2023, as part of a US anti-bribery investigation into the company and its senior management.
At the time, FBI agents provided Sagar with a copy of the search warrant and served him with a grand jury subpoena. The warrant specified the offences, individuals, and entities under investigation.
However, Adani Green did not disclose the raid to the stock exchanges, breaching SEBI's Listing Obligations and Disclosure Requirements (LODR), as it was considered a material event.
Failure to comply could lead to severe action by SEBI, including a significant monetary penalty. Given the size and influence of the Adani Group, securities lawyers anticipate a hefty fine for the company and its key managerial personnel, should they be implicated by SEBI.
A year later, in response to a media report regarding a US probe into the Adani Group over potential bribery charges, Adani Enterprises denied receiving any notice from the US DOJ.
Similarly, Adani Green Energy disclosed its awareness of the investigation but stated that it had no links to the alleged anti-corruption violations.
The US DOJ has also accused the company of failing to disclose the anti-bribery investigation to its US-based bondholders when selling them bonds.
In a further complaint filed by the US Securities and Exchange Commission (SEC) against Sagar and Gautam Adani, it was stated that Adani Green Energy had mentioned the possibility of employees taking actions that could expose the company to liability under anti-bribery laws in its offer document while raising funds from corporate bonds in September 2021.
The SEC contended that the company’s disclaimer, which warned of the risk of fraud, public sector corruption, and other criminal activities involving government officials, was materially misleading to investors as it suggested no actual bribery scheme existed.
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