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Adani Energy received a SEBI notice for misclassifying certain investors as public shareholders. The company will respond with clarifications. Adani Energy share price dropped 1.7% following this announcement.
Adani Energy Solutions, the power transmission subsidiary of the Adani Group, has received a notice from the Securities and Exchange Board of India (SEBI) regarding the misclassification of certain investors as public shareholders. This regulatory notice, disclosed in the company’s second-quarter earnings report, alleges that Adani Energy incorrectly categorised certain entities under public shareholding, which may have regulatory consequences.
In response to the notice, Adani Energy stated that it would cooperate fully with SEBI, providing necessary documents, clarifications, and responses to resolve the issue. The company highlighted that it would engage with the regulatory authorities to ensure compliance with all statutory requirements in due course.
The notice from SEBI comes after increasing scrutiny of the Adani Group in recent months. Adani Group companies have faced several regulatory challenges, especially after a report by US-based short-seller Hindenburg Research in January 2023, which accused the conglomerate of corporate fraud and stock manipulation. While the Adani Group denied these claims, the fallout resulted in significant volatility in its companies' stock prices, including Adani Energy.
This latest notice from SEBI is not a formal charge but a show-cause notice (SCN). It requests an explanation from Adani Energy regarding the investor classification issue and asks why legal action should not be pursued. Similar notices have been sent to other Adani Group companies and offshore investors earlier this year as part of the regulator’s ongoing investigation.
Following the disclosure of SEBI’s notice, Adani Energy’s shares dropped by 1.7% to close at ₹1,000 on Tuesday. This decline in Adani Energy share price reflects investor concerns over potential regulatory consequences and the ongoing scrutiny of the company’s financial and governance practices.
Adani Energy is now preparing its response to SEBI as it faces yet another regulatory hurdle. As the company navigates through this situation, investor sentiment and Adani Energy share price could continue to fluctuate based on the outcome of SEBI’s investigations. The company’s ability to address these issues will be critical to maintaining its market position amidst growing regulatory oversight.
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