Adani Group's troubles in India may increase after being booked in an American court on bribery charges. SEBI Probes Whether Adani Group Violated Market Affecting Information Disclosure Rules?
Meanwhile, SEBI has also sought clarification from the group. SEBI seeks answers on cancellation of airport expansion deal in Kenya and case in US. However, Adani Group is yet to respond.
According to sources, SEBI has also sought information from stock exchange officials. It asked whether Adani Green Energy Ltd had failed to adequately respond to a US Justice Department investigation into allegations of bribery. Investigation of facts may last up to two weeks. After this, SEBI will decide whether to initiate an investigation or not.
Sebi is also known to have investigated the Adani Group on the allegations of Hindenburg Research. However, it has not declared its results yet. Meanwhile, White House spokeswoman Caryn Jean-Pierre has said she is aware of the allegations against Adani. As far as the relations between India and America are concerned, the relations between the two countries are strong.
Sensex surged 1,961 points yesterday, 6 out of 10 shares of Adani Group rose After a seven-week decline, the local stock market saw a huge rally on Friday. The Sensex closed at 79,117, up 1961 points (2.54%). It was up 2,062 points during the day. The Nifty closed up 557 points (2.39%) at 23,907. This is the biggest one-day jump since June 5 i.e. in five and a half months. With this increase, the market cap of BSE listed companies is Rs. 7.32 lakh crore (1.72%) to Rs. 432.71 lakh crore has happened.
New problem: Some banks are considering stopping new loans The Adani Group may face a funding crunch from the start of the case in the US. Credit analysts say some banks are considering a temporary ban on new loans to the Adani Group. However, the group's existing debt will remain unchanged. Research firm CreditSites expressed near-term concerns.
He said refinancing is the biggest concern for the group's green energy business. Ratings agency S&P has warned that the group will need regular access to equity and debt markets, but it may find few buyers. Domestic, international banks and bond investors may limit their investment.
What's next: Fears of impact on international investment in India On Friday, Adani Ports and Special Economic Zone's 2029 bond fell $2.5 to $87.8. It has dropped more than $5 in two days. Also, long-maturity bonds fell $5 in two days to below 80 cents. In such a situation the matter cannot be limited to Adani.
India's renewable energy sector and international investment are likely to have a wide-ranging impact. According to analyst Nimish Maheshwari, the dispute could reduce international investment in India's renewable energy sector. Investors may demand greater transparency and scrutiny, which may slow down project financing.
America is tough on breaking the rules On the other hand, Sanjay Wadhwa, Acting Director, Enforcement Division, US Securities and Exchange, said that if US securities laws are violated, we will continue to take strict action and hold them accountable.
The way of reconciliation also opened: Cases imposed by the US Justice Department can be appealed, according to legal experts. A legal solution like conciliation can be sought. Although this will cost a lot, it can provide relief from legal battles.
According to Shiv Sapara of Kochhar & Company, the payment in the settlement may also be in the form of a penalty. However, this would also mean admitting a lie.
Supreme Court lawyer Tushar Kumar said such a settlement could help Adani avoid prolonged public scrutiny and reputational damage, which would not be possible in the case. According to US law, bribery cases can be settled under the FCPA (Foreign Corrupt Practices Act), but there is no such law in India.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
