The Securities and Exchange Board of India (SEBI) is investigating the Adani group's links with some of the investors in the group’s aborted FPO, reported news agency Reuters. The report cited two sources saying that SEBI is looking into any potential violation of Indian securities laws or any conflict of interest in the share sale process. 


The securities market regulator investigating relationships between Adani group and at least two Mauritius-based firms – Great International Tusker Fund and Ayushmat Ltd. – which participated as anchor investors, among others, said the sources, according to the report.  One of the sources told the news agency that the focus of the investigation would be whether any of the anchor investors are "connected" to the founder group.


Any firm connected to a company's founder or the founder group is ineligible to apply under the anchor investor category according to India's capital and disclosure requirement rules. 


Since the January 24 report by Hindenburg Research, the Adani group has seen shares in its seven companies lose more than $100 billion in market value. Adani group has denied the allegation made in the report. However, Adani Enterprises withdrew its Rs, 20,000 crores FPO because of the sharp selloff of its stocks. 


The report said that under SEBI’s scanner are also 2 of the 10 investment banks that managed the FPO, Elara Capital, and Monarch Networth Capital. It said that the roles of Elara and Monarch are being examined to role out "any conflict" in the share-offering process.



A small share of Monarch, which had previously served as the group's book runner, was allegedly held by an Adani private organisation, according to Hindenburg’s report. It had claimed that "this tight association seems to represent an evident conflict of interest." 


The short seller also claimed that three Adani equities accounted for 99 per cent of the market value of an Elara fund with a Mauritius address.


However, according to the Adani group, Monarch was chosen for prior share sales "because of their reputation and capacity to access the retail market." Regarding Elara, Adani has stated that "innuendos" that the company was somehow connected to the conglomerate founders were false.


Citing two government sources the report said that the effect of Hindenburg's accusations has often been brought up as a source of worry at the national level, including at Prime Minister Narendra Modi's office. The opposition parties have called for an investigation into Hindenburg's claims.


The report added that the corporate affairs ministry, which is in charge of regulating Indian firms, has briefed Modi's office staff members and communicated with SEBI. On February 2, the ministry started examining Adani's prior financial records, it added.