Exclusive-India regulator probing some Adani offshore deals for possible rule violations By Reuters

By Jayshree P Upadhyay

MUMBAI (Reuters) – India’s market regulator is investigating possible violation of ‘related party’ transaction rules in the Adani Group’s dealings with at least three offshore entities that have links to the brother of the conglomerate’s founder, two people said.

The three entities allegedly entered into several investment transactions with unlisted units of the ports-to-power conglomerate founded by billionaire Gautam Adani over the last 13 years, said the sources with direct knowledge of the matter.

Vinod Adani, Gautam Adani’s brother, is either a beneficial owner, director or has links with those three offshore entities, said the two sources, adding the regulator, the Securities and Exchange Board of India (SEBI), is probing if lack of that disclosure violated ‘related party transaction’ rules.

Under Indian laws, direct relatives, promoter groups and subsidiaries of listed companies are considered related parties.

A promoter group is defined as an entity that has a large shareholding in a listed company and can influence company policy.

Transactions between such entities have to be disclosed in regulatory and public filings and require shareholder approval above a specified threshold. Violations typically attract monetary fines.

An e-mail to SEBI requesting comment was not answered. SEBI chairperson Madhabi Puri Buch declined to comment on the Adani investigations at a news conference on Wednesday.

An Adani Group spokesperson said Vinod Adani is a member of the Adani family and is part of the promoter group, but he does not hold any managerial position in any of the listed Adani entities or their subsidiaries.

“This fact, like all other material information required to be reported, has been disclosed to the regulatory authorities in the past and also as and when required,” the spokesperson added, without commenting on the regulatory probe into offshore entities.

Vinod Adani could not be reached for comment. Requests for comment sent to his holding company in Dubai, Adani Global Investment DMCC, were not responded to.

The probe comes after U.S. short-seller Hindenburg Research’s Jan. 24 report alleging improper use of tax havens and stock manipulation by Adani Group, among other things – charges it has denied.

Hindenburg’s report eroded more than $100…