In its probe into the Adani Group, India’s market watchdog, the Securities and Exchange Board of India (SEBI), has unearthed certain disclosure lapses and discrepancies in offshore fund holdings, according to insiders speaking to Reuters.

What Happened? This investigation was initiated after Hindenburg Research, a U.S.-based firm, raised red flags about the governance practices within the Gautam Adani-led conglomerate. This scrutiny led to a staggering ₹8.26 lakh crore dip in the market valuation of Adani stocks, although the group had refuted any misconduct earlier this year.

While the identified breaches seem “technical” and might only result in financial penalties, the exact nature and extent remain under wraps. The Supreme Court, closely monitoring SEBI’s inquiry, is scheduled to hear the matter later today. However, SEBI intends to keep its findings confidential until it finalises its stance on the matter.

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Lapses but at what cost? A significant revelation from the probe indicates lapses in reporting specific transactions between related parties. Such omissions can distort the financial image of the listed Indian company. The potential penalty for each violation could reach up to ₹1 crore.

Furthermore, the investigation highlighted that certain Adani entities had offshore fund holdings that didn’t align with Indian regulations. The exact repercussions of these breaches remain uncertain.

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