India's capital markets regulator is investigating whether the Adani Group broke rules requiring companies to disclose important information that could impact the market, according to sources familiar with the matter.

Persons, who asked not to be named as the information is confidential, claimed that the Securities and Market Board of India has questioned stock market authorities about whether Adani Green Energy Ltd. failed to appropriately report the US Justice Department's investigation into bribery charges. According to one of the persons, Sebi may decide whether to launch a formal investigation after the two-week fact-finding procedure is finished. A Bloomberg News report from March 15 mentioned that U.S. prosecutors are investigating whether an Adani group entity or individuals connected to the company, including its billionaire chairman, were involved in bribing Indian officials to gain favourable treatment for an energy project.

The Adani Group stated that they were not aware of any investigation involving their chairman and asserted compliance with anti-bribery laws in India and globally. In a stock exchange filing on March 19, Adani Green acknowledged an ongoing investigation into possible violations of U.S. anti-corruption laws, which pertains to an unrelated third party. In an effort to raise money from US investors, Gautam Adani allegedly disguised a $250 million bribery scheme to secure solar energy contracts in India, according to charges brought against the company by US prosecutors on Wednesday. An Adani Group representative refuted the claims. 

US prosecutors argue in their indictment that Adani's March denial to Bloomberg was a false statement intended to advance the alleged fraud conspiracy, considering that a year prior, Adani's nephew, Sagar Adani, had been served with a search warrant and grand jury subpoena. Sagar is the executive director of Adani Green, the biggest renewable energy developer in India. In India, stock exchanges like BSE and NSE play a key role in regulating the market by enforcing rules set by SEBI (Securities and Exchange Board of India), including those related to disclosures. Shares of Adani’s flagship company saw a sharp drop of up to 23% on Thursday following a U.S. indictment, though they recovered some losses on Friday.

SEBI, which investigates issues brought to its attention by the exchanges, has previously looked into the Adani Group for disclosure-related concerns, including allegations raised by the short-seller Hindenburg Research last year. However, SEBI has not yet shared its findings. SEBI, the market regulator, has previously investigated the Adani Group for issues like not following disclosure rules. This includes looking into claims made by Hindenburg Research last year. SEBI hasn’t shared the findings of its investigation yet. The regulator can only impose civil charges, and violations of disclosure rules usually result in fines. Sebi, the Bombay Stock Exchange Ltd., and NSE Ltd. did not reply to emails asking for their comments.