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Adani Case: ED flags suspicious activities by 16 entities, including one private Indian bank.

This comes days after the markets regulator SEBI reported the status of its investigation in the Adani-Hindenburg matter to the SC.

According to sources, the ED has looked at connections between an Indian private bank and 15 additional entities in the case connected to short selling of the shares of Adani group firms. This comes days after the markets regulator SEBI reported the status of its investigation in the Adani-Hindenburg matter to the SC.

According to a TOI article published on Wednesday, the Securities and Exchange Board of India (Sebi) has received information from the central investigative agency against these 16 firms, including foreign portfolio investors (FPIs).

While the ED must wait for a predicate offence before registering an inquiry under the Prevention of Money Laundering Act (PMLA), the SEBI has the authority to file a criminal investigation against any firm deemed to be engaged in any questionable behaviour that may jeopardize legitimate legal procedures.

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ED Can Launch a PMLA Investigation on Adani:

If Sebi files a prosecution complaint in this matter, the ED may use it as justification to launch a PMLA investigation, according to TOI.

According to sources cited by TOI, the ED has amassed a significant amount of intelligence against several Indian and foreign companies engaged in what appear to be “suspicious” activity in the Indian stock market, some as early as November 2022, relating to the Hindenburg report and short-selling positions taken by them.

On January 24, a US-based short-seller named Hindenburg published a paper alleging stock manipulation and fraud by the Gautam Adani-led business. The Adani Group called Hindenburg “an unethical short seller” and said the New York-based organization’s research was “nothing but a lie.” The following drop in share prices benefits a short seller in the securities market.

Few FPIs, according to the research, had opened short positions just two or three days before to Hindenburg’s explosive report’s release. To determine their beneficial ownership, an investigation is currently being conducted. The report further states, citing sources, and that some of these firms were trading for the first time and that the majority of them had never dealt with Adani shares.

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