5 Adani group stocks in focus as firms settle Sebi proceedings linked to Hindenburg report

Shares of five Adani group companies will be in focus on Wednesday after settling adjudication proceedings with the Securities and Exchange Board of India (Sebi) over alleged disclosure and corporate governance violations examined following 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 five companies together paid a total settlement amount of Rs 1.51 crore. Adani Enterprises paid the largest amount at Rs 76.05 lakh, while Adani Green Energy paid Rs 45.50 lakh. Adani Total Gas, AWL Agri Business and Adani Energy Solutions each paid Rs 9.75 lakh.

The proceedings were settled without the companies admitting or denying the findings of fact or conclusions of law. Sebi said the adjudication proceedings, which were initiated through a show-cause notice dated February 15, 2024, have been disposed of following receipt of the settlement amount.


The regulator had examined allegations concerning the disclosure of 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. Sebi subsequently initiated adjudication proceedings against five of these companies based on its findings.

In the case of Adani Enterprises, Sebi alleged that related-party transactions were not disclosed in the annual report for FY13. The transactions involved Adani Estates Private Ltd, a subsidiary of Adani Enterprises, and Vakoder Investment Ltd, which was described as a related party of Adani Enterprises.

The regulator also raised allegations concerning audit and limited review reports that were 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 further 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.

In the cases of Adani Total Gas and AWL Agri Business, Sebi alleged that the limited review report for the quarter ended December 2021 was signed by Shah Dhandharia & Co LLP without a valid peer review certificate.

For Adani Green Energy, the alleged violation concerned 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. Sebi alleged that these reports were signed by Dharmesh Parikh & Co LLP without a valid peer review certificate.

For Adani Energy Solutions, formerly known as Adani Transmission, Sebi alleged that the limited review report for the quarter ended June 2015 was signed by Dharmesh Parikh & Co LLP without a valid peer review certificate.

The settlement order also provides for action if issues subsequently emerge in relation to the settlement. Sebi said it can restore or initiate proceedings if any representation made by the applicants is later found to be untrue, if there is a breach of undertakings or waivers submitted during the settlement process, or if a discrepancy is found in arriving at the settlement terms.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/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 disclaimers here.