U.S. authorities are reportedly investigating the representations made by Adani Group to its American investors, following allegations of share price manipulation by short-seller Hindenburg Research.

What Happened? The US Attorney’s Office in Brooklyn and the Securities and Exchange Commission (SEC) have sent inquiries to institutional investors, seeking information on what Adani Group disclosed to them, Bloomberg reported, citing sources.

While inquiries from prosecutors do not necessarily indicate forthcoming legal action, the scrutiny adds to the conglomerate’s existing regulatory probes in India. Adani Group, led by billionaire Gautam Adani, faces allegations of stock manipulation and accounting fraud.

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The inquiries coincided with Prime Minister Narendra Modi’s visit to the US, where President Joe Biden welcomed him. Adani Group spokesperson told the business publication that the firm was not aware of any subpoenas issued to investors and stood firm on the accuracy of its disclosures.

The firm was rocked by a scathing attack by US-based research firm Hindenburg Research, which in January accused the company of serious financial misconduct, though Adani Group has denied the claims. 

However, things have changed since then, and the group’s stocks have made somewhat of a comeback in the stock market after a Supreme Court-appointed expert committee told the apex court that it had founded no regulatory lapses on the part of the Securities and Exchange Board of India (SEBI).

Some investors, such as JPMorgan Chase, divested from Adani Group stocks, while others like BlackRock and Deutsche Bank’s fund management unit retained their positions. In an effort to reassure investors, Adani Group held meetings with PIMCO, BlackRock, and Blackstone to market privately-placed bonds.

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