Shares of Adani Group companies slumped on Friday after a report the U.S. Justice Department and the Securities and Exchange Commission were examining the company’s communications to investors.
Shares of the flagship Adani Enterprises
512599,
fell 7%, as other listed Adani companies including Adani Power
533096,
fell as well.
Bloomberg News reported, citing a person familiar with the matter, that the U.S. Attorney’s office in Brooklyn has asked institutional investors with large holdings in the India conglomerate about the company’s communications to them after a short-seller report was released. The same report cited two people as saying the SEC also has a similar inquiry under way. Adani Group said it is not aware of any subpoenas to its investors, according to Bloomberg.
Adani Group shares have slumped since the short-selling firm Hindenburg Research said it used offshore companies to inflate its share price — allegations the company has repeatedly denied.
Last month, a panel convened by India’s Supreme Court said in a preliminary report that it has not found evidence that Adani companies have been manipulated abroad, while it did say that the market regulator suspects wrongdoing.
The cumulative market-cap losses for Adani Group companies have been about $114 billion since the Hindenburg report was first released.
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