Major setback for Adani Group, SEBI issues notice as chairperson Buch faces scrutiny

In what can be termed as validation of Hindenburg Research’s allegations against Indian conglomerate Adani Group, India’s market regulator SEBI has reportedly issued a show-cause notice (SCN) to the Gautam Adani-owned group. In 2022, the US-based short seller had set the cat among the pigeons by alleging that Adani Group companies violated SEBI norms on minimum public shareholding as promoter holding was beyond the stipulated 75 per cent.

Now, according to a report by Business World, SEBI has issued a SCN to the Adani Group, seeking clarification on alleged wrongful classification of certain promoter group entities as public shareholders. The details of the SCN were revealed in Adani Energy’s disclosures made in its September quarter results filed on October 22.

“During the current quarter, a SCN was received alleging wrongful categorization of shareholding of certain entities as public shareholding and consequences therefrom,” the disclosure read.

The notice against the Adani Group comes at a time when Madhabi Puri Buch’s tenure is due to end and the central government is expected to an advertisement inviting the applications from aspirational candidates. Some experts also believe that her tenure may be extended by the government.

Similarly, there are concerns that Buch may be dragging her feet over summons issued by the Public Accounts Committee (PAC) of the Indian Parliament.

Questions were raised when Buch skipped the PAC meeting after saying she would be able to attend it virtually. Less than two hours before the meet was scheduled to begin, Buch informed the PAC that she won’t be able to attend due to “exigencies”.

Buch is facing conflict of interest allegations linked to Hindenburg Research’s claims.

Additionally, questions have been raised by India’s opposition Congress party regarding payments Buch allegedly received from ICICI Bank, where she had worked before joining SEBI as a full-time member and later becoming its chairperson.

Both Buch and her husband, Dhaval Buch, have denied all allegations, asserting that full disclosures were made to SEBI before her appointment.

(With inputs from agencies)