NEW YORK - The United States authorities are looking into what representations Adani Group made to its American investors following a scathing short-seller’s report that accused the company of using offshore companies to secretly manipulate its share prices.

The US Attorney’s Office in Brooklyn, New York, has sent inquiries in recent months to institutional investors with large holdings in the India conglomerate, one person familiar with the inquiries said.

The requests for information were focused on what Adani Group told those investors, said the person. The Securities and Exchange Commission also has a similar probe under way, two other people said.

Requests for information from US prosecutors do not necessarily mean that criminal or civil proceedings will be filed as law enforcement agencies often open inquiries that do not lead to action.

The interest from US authorities adds to the intense scrutiny of Adani Group, one of India’s biggest conglomerates, following short-seller Hindenburg Research’s report accusing it of long-running stock manipulation and accounting fraud.

The group, led by billionaire Gautam Adani, already faces regulatory probes in its home country.

News of the inquiries emerged as US President Joe Biden rolled out the red carpet for Indian Prime Minister Narendra Modi at the White House.

Both Mr Adani and Mr Modi hail from the western Indian state of Gujarat, and the tycoon’s meteoric growth mirrors Mr Modi’s own political journey to India’s top elected office.

A spokesman for the Adani Group said it was not aware of any subpoenas to investors.

“Our various issuers groups remain confident that the disclosures are full and complete as disclosed in the relevant issuer offering circulars,” the spokesman said.

Hindenburg report

Adani Group’s troubles began when Hindenburg on Jan 24 released a report accusing the conglomerate of using a network of offshore companies in tax havens to embellish share prices and financial results.

The report also alleged that the group had flouted disclosure and shareholding laws.

Adani Group rejected the accusations and said in a lengthy rebuttal that Hindenburg’s report was “nothing short of a calculated securities fraud”.

Still, a steep share price decline that followed that at one point wiped as much as US$153 billion (S$206 billion) off the combined market value of Adani Group’s 10 publicly traded businesses.

Some investors divested quickly. JPMorgan Chase cut Adani Group stocks from its ESG funds in the weeks following the report. Other institutional money managers, like BlackRock and the fund management unit of Deutsche Bank AG, stayed put.

In the months following the report, GQG Partners had spent about US$2.5 billion in five Adani Group stocks.

In a bid to reassure investors, Adani Group in March met with Pacific Investment Management Company, BlackRock and Blackstone as part of a plan to market privately placed bonds for some of its companies, Bloomberg previously reported.

New York-based Hindenburg, led by Mr Nathan Anderson, first attracted Wall Street’s attention in 2020 after raising red flags about electric-vehicle maker Nikola.

Prosecutors pursued that lead, which culminated in the conviction of Nikola founder Trevor Milton for fraud in 2022. BLOOMBERG