ACC not to conduct independent probe into Hindenburg allegations – ET Infra

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Leading cement maker ACC Ltd., acquired by the Adani Group last year in India’s biggest building- materials M&A deal, said Thursday it would not conduct an independent probe into allegations of financial misconduct levelled by US short seller Hindenburg Research against the infrastructure conglomerate.

The cement maker, India’s oldest manufacturer of the commodity, said that based on the review of independent law firms hired by the Adani Group, and the pending outcome of regulatory investigations into the matter, ACC has decided to not carry out any separate independent probe.

Capital-markets regulator, the Securities and Exchange Board of India (Sebi), is conducting a probe into the Hindenburg report and its aftermath, and this report is expected by August 14.

The latest statement from ACC comes after multiple Adani Group companies had said in February while announcing their earnings for the October-December 2022 period that the conglomerate and its entities will be evaluating an independent assessment into the Hindenburg allegations that caused the Adani Group’s market value to shrink nearly $150 billion within weeks of the report’s publications.

“To uphold the principles of good corporate governance, the managements of Adani Group entities are evaluating an independent assessment, basis the requisite corporate approvals, to look into the issues and compliance of applicable laws and regulati.ons, transaction specific issues, etc,” Adani Ports and Special Economic Zone had said in February.

However, no update was shared in this regard by the Adanis subsequently.

The Adani Group did not respond to ET’s request for a comment.

In January, Hindenburg Research had published a report that accused the Adani Group of ‘fraud’ and ‘stock price manipulation’ using offshore entities.

The Adani Group has steadfastly denied all allegations.

In the aftermath of Hindenburg’s allegations, the Supreme Court constituted an expert committee to investigate the matter and the panel’s report was made public in May. The committee noted that prima facie, it could not find any regulatory failure by Sebi in dealing with the alleged contravention of securities laws by the Adani Group companies.

The expert committee noted that prima facie, Sebi had found no wrongdoing with regards to the ownership of offshore funds that control a significant stake in Adani Group companies. But it noted that further investigation was required in this regard.

The report also noted that Sebi had found no pattern of artificial trading in Adani Group stocks.

Sebi’s report in the matter is expected to be published by the Supreme Court-stipulated deadline of August 14.

  • Published On Jul 28, 2023 at 07:38 AM IST

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