Five Adani group companies have settled Sebi adjudication proceedings linked to alleged disclosure and corporate governance violation that were examined after issues raised in the Hindenburg Report. The companies are Adani Enterprises, Adani Total Gas, AWL Agri Business, Adani Green Energy and Adani Energy Solutions. The settlement order was passed by Sebi Adjudicating Officer Jai Sebastian on September 22.
The total settlement amount is Rs 1.51 crore. Adani Enterprises paid the highest amount at Rs 76.05 lakh, followed by Adani Green Energy at Rs 45.50 lakh. Adani Total Gas, AWL Agri Business and Adani Energy Solutions paid Rs 9.75 lakh each.
The proceedings were settled without the companies admitting or denying the findings of fact and conclusions of law. Sebi said the adjudication proceedings initiated through a show-cause notice dated February 15, 2024, stand disposed of after receipt of the settlement amount.
Sebi had carried out an examination into the allegations related to disclosure of alleged related-party transactions and corporate governance issues highlighted in the Hindenburg Report. The examination covered Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power, Adani Transmission, Adani Green Energy, Adani Total Gas and Adani Wilmar.
Based on the findings, Sebi initiated adjudication proceedings against five companies.
Also Read: Karan Adani settles PMC Projects case with Sebi by paying Rs 13.65 lakh
In the case of Adani Enterprises, the regulator alleged violations relating to non-disclosure of related-party transactions in the annual report for FY13. The alleged transactions were between Adani Estates Private Ltd, a subsidiary of Adani Enterprises, and Vakoder Investment Ltd, which was described as a related party of Adani Enterprises.
Sebi also alleged issues relating to audit and limited review reports signed by audit firms without valid peer review certificates.
For Adani Enterprises, Sebi alleged that the audit report for the financial year ended March 2015 and the limited review report for the quarter ended June 2015 were signed by Dharmesh Parikh & Co LLP without a valid peer review certificate. It also alleged that limited review reports for the quarters ended June 2017, September 2017 and December 2021 were signed by Shah Dhandharia & Co LLP without a valid peer review certificate.
For Adani Total Gas and AWL Agri Business, the alleged violation related to the limited review report for the quarter ended December 2021 being signed by Shah Dhandharia & Co LLP without a valid peer review certificate.
For Adani Green Energy, Sebi alleged that the audit report for the financial year ended March 2019 and limited review reports for the quarters ended September 2018, December 2018 and June 2019 were signed by Dharmesh Parikh & Co LLP without a valid peer review certificate.
For Adani Energy Solutions, formerly Adani Transmission, the alleged violation related to the limited review report for the quarter ended June 2015 being signed by Dharmesh Parikh & Co LLP without a valid peer review certificate.
The order also said the settlement is not final protection if later issues emerge. Sebi said it can restore or initiate proceedings if any representation made by the applicants is later found to be untrue, if there is any breach of undertakings or waivers filed during settlement, or if there is a discrepancy in arriving at the settlement terms.
Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclourses here.
