The central government's Ministry of Corporate Affairs has started looking into the financial statements and other regulatory filings from previous years, as per a Reuters report. This is reportedly the first action of scrutiny from the government's end after the Hindenburg-Adani row started over a week ago.
Last Wednesday, US-based short-seller Hindenburg Research raised allegations of fraud and illegal off-shore activities against the Adani Group, following which the conglomerate suffered immense losses in its entitiies' market capitalisations.
It is estimated that the Gautam Adani-led group lost over Rs 10 lakh crore in the seven trading sessions since Hindenburg published its report. Further, Adani shelved the Rs 20,000 crore share sale of its flagship company citing "market volatility".
Market regulator SEBI is already looking into supposed irregularities in the FPO that was called off on Wednesday.
The new inspection from the Ministry of Corporate Affairs, reportedly started on Thursday, is under "Section 206" of Companies Act. This allows for the authorities to review financial documents such as balance sheets, ledgers, etc, submitted over the years.
"An inquiry has been initiated by (the) Director General of Corporate Affairs. The ministry has been closely monitoring the situation and will take appropriate measures in time," a senior government official told Reuters.
