India regulator reaches final lap in Adani probe, to take action on outcome

FILE PHOTO: Traffic moves past the logo of the Adani Group installed at a roundabout on the ring road in Ahmedabad

BENGALURU (Reuters) -India's market regulator has very nearly completed its probe into whether billionaire Gautam Adani's conglomerate violated securities laws and will take any action required based on its findings, it said in a Supreme Court filing on Friday.

The Adani group's listed companies lost more than $100 billion in market value earlier this year after U.S.-based Hindenburg Research raised several governance concerns and suggested the group had made improper use of tax havens. The group has denied wrongdoing.

The Securities and Exchange Board of India (SEBI) said it has been investigating 24 transactions involving the group's listed companies, and has completed its work on 22 of them.

It said it examined 13 Adani group dealings for possible violations of related-party transaction rules.

The regulator in Friday's report also said its investigation on some offshore deals covered 12 foreign portfolio investors who were public shareholders of Adani group companies.

But since some entities related to these investors are located in tax haven jurisdictions, "establishing the economic interest shareholders of the 12 FPIs remains a challenge", the regulator said, adding that it has sought information from five foreign countries on this issue.

SEBI "shall take appropriate action based on outcome of the investigations," it said.

Following the Adani group firms' share price losses earlier this year, the Supreme Court asked SEBI to look into the Hindenburg allegations and submit its findings to a six-member panel formed in March, which included a retired judge and veteran bankers.

The court appointed panel said in May that the regulator had so far drawn a blank in its investigations and its ongoing pursuit of the case is a "journey without a destination" but gave the regulator more time to complete its probe.

Possible actions by the market regulator include monetary penalties and directives against the Adani group companies and its directors.

(Reporting by Chris Thomas and NR Sethuraman in Bengaluru; Editing by Savio D'Souza and Hugh Lawson)