The Supreme Court of India is set to pronounce its order on appointing an independent expert panel to investigate the alleged misreporting by Adani Group’s power arm, Adani Power Ltd. The controversy arose after a report by a US-based research firm, Hindenburg Research, accused Adani Power of inflating the value of its power equipment imports to inflate profits artificially.
The Hindenburg report alleged that Adani Power had inflated the price of power equipment imports by over-invoicing, which allowed the company to siphon off funds from India to tax havens abroad. The report also alleged that Adani Power had used this inflated invoicing to artificially inflate its profits, which helped the company secure loans from banks and financial institutions.
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The report led to a sharp fall in Adani Power’s stock prices, triggering an investigation by the Securities and Exchange Board of India (SEBI) into the company’s accounting practices. However, Adani Power has denied the allegations and accused Hindenburg Research of publishing a “malicious and misleading” report.
The matter was brought before the Supreme Court by a public interest litigation (PIL) filed by an NGO, the Common Cause, seeking an independent investigation into the allegations against Adani Power. Several other civil society organizations, including Greenpeace India, supported the PIL.
During the hearing, the Supreme Court asked Adani Power and Hindenburg Research to submit their responses to the allegations. The court had also sought the views of the SEBI and the Ministry of Corporate Affairs.
On the last hearing held on February 23, the Supreme Court had reserved its judgment on appointing an independent expert panel to investigate the allegations against Adani Power. The court had also expressed its concern over the serious nature of the allegations and the need for an independent investigation to ensure transparency and accountability.
The court had earlier suggested that the expert panel should comprise accountancy, taxation, and forensic auditing experts. The panel would be tasked with examining Adani Power’s accounting practices and financial statements to ascertain whether the company had engaged in wrongdoing.
The Adani Group, which is one of India’s largest conglomerates, has been facing several controversies in recent times. The group has been accused of receiving preferential treatment from the government, especially in awarding contracts for infrastructure projects.
The controversy surrounding Adani Power has added to the group’s woes, with several investors and financial institutions expressing their concerns over the allegations of financial irregularities. The group’s stocks have taken a beating in recent weeks, with some analysts predicting further declines if the allegations are true.
The Supreme Court’s verdict on appointing an expert panel is expected to have significant implications for Adani Power and the Adani Group. If the allegations are proven to be accurate, it could lead to severe penalties for the company and damage the reputation of the Adani Group.
In conclusion, the Adani-Hindenburg row has raised serious questions about the transparency and accountability of India’s corporate sector. Investors, analysts, and civil society organizations will closely watch the Supreme Court’s verdict on appointing an independent expert panel to investigate the allegations against Adani Power. The verdict is expected to provide much-needed clarity and ensure justice is served.
