Almost 2 months after the release of the Hindenburg report on the Adani Group, the story continues to develop.
The Company vide a disclosure dated March 16, 2023 provided clarifications in view an article on The Wire Inc. dated March 13, 2023 titled “Adani Group Does Not Own Ambuja Cements Limited Cements and ACC Limited; Ultimate Beneficiary Is Vinod Adani”. The Company clarified that Mr. Vinod Adani, elder brother of Gautam Adani by virtue of being an immediate relative is part of the ‘promoter group’ of the various listed entites of Adani Group. It further said that the Endeavour Group, which is controlled by Vinod Adani, belongs to the Adani Gorup.
This came as a follow up to the Hindenburg Report which had alleged that Vinod Adani was responsible for creating and managing offshore shell entities meant for stock parking, market manipulation and laundering money. Adani Group had refuted the allegations and had said that “Vinod Adani does not hold any managerial position in Adani listed entities or their subsidiaries and has no role in their day to day affairs”.
The Business Standard in its article titled “Cloud over Vinod Adanis Related Party Status”, analyses the questions that have been raised relating to the related party status of Vinod Adani.
In this regard Mr. Sumit Agrawal, Founder of Regstreet Law Advisors and former SEBI Officer, commented that although “In general, members of a promoter group or entities connected to them are considered related parties under most laws and accounting standards. However, there may be specific circumstances where they may not be considered as related parties. For example, if they do not have significant influence or control over the company, or if they do not have a material financial interest in the company, they may not be considered related parties. He further noted that “The facts only SEBI or the parties know. If the transactions involve entities that are part of the Adani Group or connected to the promoter group, it is likely that they would be considered related parties, unless there are specific circumstances that would exclude them from the related party net. However, SEBI in such cases usually restricts itself to the requirement of disclosure and approval of audit committee / independent directors.”
The article of the Business Standard has been enclosed for the readers.
Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.
