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In another setback for the Adani group, the Securities and Exchange Board of India (SEBI) has issued show-cause notices (SCN) to other Adani group firms.

This comes after Adani Energy Solutions disclosed the SEBI's show cause notice on Friday in its September quarterly results report. 
 
In the latest, Adani Power disclosed SEBI show cause notices in their earnings report on Monday.
 
SEBI's show-cause notice
 
"During the quarter ended 30th September 2024, SEBI announced in a press release, that it had concluded one of the pending investigations.

Also, during the current quarter, the SEBI completed the other pending investigation and has issued a show cause notice (SCN) to the company, alleging wrongful categorisation of shareholding of certain entities, relating to SEBI public shareholding norms and consequences therefrom.

The company is in process of responding to the regulatory and statutory authorities by providing information, responses, documents and/or clarifications, as applicable." 
 
Adani Power submitted the disclosure along with its earnings report on Monday.

Although the group firm did not elaborate on the details, the company's filing states that the notice was received during the September quarter.

SEBI's notices to Adani Group firms allege the companies wrongly categorised the shareholding of certain entities as part of its public shareholding. 

That is one of Hindenburg's allegations against the Indian conglomerate in its scathing report in January last year.

Under SEBI's rules, every listed company must ensure that public shareholders own at least 25 per cent of its equity.

Any holdings by entities, including foreign portfolio investors, that have links to the promoter group must be reclassified as promoter holdings.
 
Adani Power, in its earnings filing with the BSE, said "During the quarter ended 30th September 2024, SEBI announced in a press release that it had concluded one of the pending investigations."

The firm said, "Also during the current quarter, the SEBI completed the other pending investigation and has issued a show cause notice to the company, alleging wrongful categorisation of shareholding of certain entities, relating to SEBI public shareholding norms and consequences therefrom."
 
Adani Power added, "The company is in the process of responding to the regulatory and statutory authorities by providing information, responses, documents and/or clarifications, as applicable." 

Sequence of events
 
The controversy started after Hindenburg Research made accusations against the Indian business group in January last year.

The US Research firm claimed several foreign funds owned shares in Adani group firms with connections to the promoter entities.

Hindenburg accused that the group companies violated SEBI norms on minimum public shareholding as promoter holding was beyond the stipulated 75 per cent.
 
That lines up with the SEBI's allegations in its latest notices to the Adani group firms. The Adani group has always refuted these claims.

For now, all eyes will be on the earnings report filings of Adani's flagship firm and Adani Ports later on Tuesday.
 
The timing of the SEBI notice raises eyebrows.

This comes as SEBI chief Madhabi Puri Buch's tenure is coming to an end.

The government is expected to call for applications from prospective candidates soon.

There are concerns that Buch may be dragging her feet over summons issued by the Public Accounts Committee.

The SEBI chief skipped the PAC's deposition scheduled for October 24, citing unavoidable personal work.

The PAC chairman postponed the meeting as Buch skipped the deposition and was unhappy about the last-minute cancellation.