Mumbai, 3 May

Seven out of the 10 listed firms of Adani group have received show cause notices from the Securities and Exchange Board of India (SEBI) for alleged violation of related party transactions and non-compliance with listing regulations, the companies said in their regulatory filings to the stock exchanges.

While group's flagship Adani Enterprises Ltd, renewable energy firm Adani Green Energy Ltd (AGEL) and city gas distributor Adani Total Gas Ltd said SEBI sent notices of their parent or holding company controlled by conglomerate's chairman Gautam Adani, ports company Adani Ports & Special Economic Zone, Adani Power, electricity transmission firm Adani Energy Solutions, and commodities firm Adani Wilmar said they have received SEBI notices.

Making the disclosure as part of notes to their respective January-March quarter and 2023-24 financial results statements, all the firms in almost identical statements said there is no material non-compliance with applicable laws and regulations and no material consequential effect.

However, auditors of the companies, except those for Adani Green Energy, Adani Total Gas Ltd and Adani Wilmar, issued a qualified opinion on the financial statements, implying that the outcome of the SEBI investigation may have a bearing on the financial statements in the future.

The conglomerate's cement companies ACC and Ambuja Cement said they have not received any notice from SEBI on the matter and there was no open matter relating to them and any non-compliance of applicable regulations. Its media unit NDTV did not say anything about receiving SEBI notices.

The SEBI notices are part of a probe that followed U.S. short-seller Hindenburg Research making damning allegations of corporate fraud and stock price manipulation against the Adani Group in January 2023. Though Adani vehemently denied all allegations, the report triggered a stock rout that wiped out about $150 billion of the group's market value at its lowest point.

Most of the group stocks have bounced back as the ports-to-energy conglomerate plotted a comeback strategy.

A show cause notice is not an indictment and seeks an explanation from entities as to why legal action should not be taken against them.

AGEL in the filing on Friday said a short-seller's report (SSR) made certain allegations against some of the Adani Group companies.

The matter went to the Supreme Court (SC), which observed that SEBI was investigating the matter while also constituting an Expert Committee to investigate as well as suggest measures to strengthen existing laws and regulations.

The Expert Committee in its May 6, 2023, report found "no regulatory failure in respect of applicable laws and regulations," AGEL said. "The SEBI also concluded its investigations in 22 of the 24 matters as per the status report dated August 25, 2023, to the SC." On January 3, 2024, the SC disposed of all matters in various petitions, including those relating to separate independent investigations relating to the allegations in the SSR. Further, the SC directed SEBI to complete the pending two investigations, preferably within three months, and take its investigations (including 22 already completed) to their logical conclusion in accordance with the law.

"During the quarter ended March 31, 2024, the holding company has received a show cause notice from the SEBI relating to validity of Peer Review Certificate (PRC) of one of joint auditors in earlier financial years, which the holding company has responded to," it said.

Adani Enterprises Ltd (AEL) on Thursday stated that it has received the notices from SEBI alleging non-compliance with provisions of the Listing Agreement and LODR Regulations pertaining to related party transactions in respect of certain transactions with third parties and validity of peer review certificates of statutory auditors with respect to earlier years.