The beginning of the most thorough international investigation into the corporate governance record of India under Prime Minister Narendra Modi was marked by a busy weekend for the country’s top judges and its leading infrastructure company. The frantic planning for the climax will now begin.
Chief Justice D. Y. Chandrachud of the Supreme Court announced on Friday that his three-member bench had received the conclusions of an expert panel it had assembled in March to investigate any regulatory lapses following a report by a short-seller against the Adani Group, a conglomerate from Gujarat, where Modi is from. The court may decide on Monday whether to extend the market regulator’s investigation into fraud claims made by Hindenburg Research, which the company has strongly refuted, or not. A plan to fund as much as 210 billion rupees ($2.6 billion) was revealed on Saturday by two of its companies, including the flagship Enterprises Ltd.
Investors won’t overlook the move’s meaning. The $2.4 billion public offering by Adani Enterprises was derailed by a report from the New York-based Hindenburg on Jan. 24 that claimed Gautam Adani, at the time the third-richest man in the world, was “pulling the largest con in corporate history.” The conglomerate made a forceful defence, but it was ineffective in stopping the sale or a crash in stock prices.
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Plans of Adani to raise equity and market cred:
Since at least 2019, Adani Enterprises and Transmission have requested board permission for funding every year in April or May. Except for 2021, Adani Green Energy Ltd. consistently obtained this authorization. However, the only equity that was truly raised occurred last year when these three companies acquired about $2 billion from International Holding Company PJSC, or IHC, a company based in Abu Dhabi.
The organization requires both a quick restoration of its stock market reputation and a stronger equity cushion for growth. The investigation will be over by the time the court grants SEBI another three or six months, and Adani may have to accept the results.
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