Indian authorities are investigating companies linked to Gautam Adani, the infrastructure tycoon catapulted to the top ranks of the global rich thanks to share price gains at his businesses during the pandemic.
The Adani Group had been under scrutiny following a media report in June that the country’s largest securities depository had frozen accounts held by three Mauritius-based funds with the bulk of their holdings in Adani companies.
In a written reply to questions from opposition politician Mahua Moitra on Monday, the state minister for finance, Pankaj Choudhary, said that the Securities and Exchange Board of India (Sebi) “is investigating some Adani Group companies with regard to compliance with Sebi regulations”.
“Further, the Directorate of Revenue Intelligence (Dri) is investigating certain entities belonging to the Adani Group of companies under laws administered by it.”
Sebi declined to comment. The Dri did not respond to a request for comment.
Shares in the six listed Adani companies fell on Monday afternoon, with Adani Total Gas dropping 5 per cent, the maximum amount permitted by exchange rules.
“While we have always been fully compliant with applicable Sebi regulations, we have made full disclosure to Sebi on specific information requests from them in the past,” Adani Group said in a statement. “However, we have not received any communication or information requests recently.”
The group added that the Dri had given a “show cause notice” to Adani Power five years ago regarding explanation of equipment valuation. The matter is now being handled in a Dri tribunal and is sub judice, an Adani Group spokesperson said.
At its annual meeting this month, Adani complained about “reckless and irresponsible reporting” and said a “twisted narrative” had hit Adani stocks. Shares in companies owned by the billionaire lost more than $20bn in value over five days in June, following the news report on the Mauritius funds.
Adani has emerged as one of India’s most powerful tycoons, expanding his ports empire into different sectors at breakneck speed. His group spans gas, power and mines and he is one of the most high-profile faces of Prime Minister Narendra Modi’s green energy drive.
He has invested in airports and data centres, taking control of the Mumbai airport from GVK Group this month. The Adani Group now operates six airports in India, and hopes to capitalise when the country’s battered tourism sector starts to recover from the pandemic.
Analysts said more information was needed from Sebi to understand the impact of the investigation. “I think we need to wait, we don’t know what it actually means, Sebi hasn’t said anything,” said Deepak Shenoy, founder of portfolio manager Capitalmind. “This looks more political than anything else.”