Corporate Affairs Ministry reviews Adani Group financial statements: sources

The Ministry inspection process was initiated on February 2, 2023 under “Section 206” of India’s Companies Act.
| Photo Credit: Reuters

The Corporate Affairs Ministry has started a preliminary review of Adani Group’s financial statements and other regulatory submissions made over the years, two senior government officials told Reuters on February 3.

The Ministry’s review marks the latest scrutiny of the Adani Group, but a first by the government.

The new Ministry inspection process was initiated on February 2, one of the government sources said, saying it was under “Section 206” of India’s Companies Act under which the government reviews financial documents submitted over the years, such as balance sheets, books of accounts or ledgers.

“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,” the first senior government official, who has direct knowledge of the proceedings, told Reuters.

A spokesperson for Adani Group did not immediately respond to a request for comment. The Ministry of Corporate Affairs, as well as the Director-General’s office, did not respond to requests for comment by Reuters.

A second government source confirmed the process had been initiated and will include looking into corporate governance practices of the company, but declined to elaborate.

The government officials declined to be named, due to confidential nature of the process.

The Section 206 legal provision under companies law also empowers the government to seek more documents from a company if it deems this necessary, such as minutes of meetings or board resolutions, two other sources familiar with the process said.