The year 2024 has been full of ups and downs for the Indian industry. The country has faced many challenges throughout this year. Many major industry groups and high profile industrialists and groups have seen different types of changes this year. The corporate world has had to grapple with many challenges this year. This year too, many such incidents were in the headlines which have left their impact for a long time. America indicts Adani In November 2023, the wealth of Gautam Adani, one of India’s richest businessmen, plunged by $12.4 billion after US short-seller Hindenburg Research made serious allegations of irregularities. The Adani Group had barely recovered from the financial and reputational consequences of that episode when new allegations related to the $250 million bribery scandal emerged. In the new case, a US court has accused group chairman Gautam Adani, his nephew Sagar Adani and Adani Green Energy CEO Vineet Jain, among others, of orchestrating a bribery scheme to win power supply contracts, including through forged documents. More than $2 billion was raised. The US Securities and Exchange Commission (SEC) summoned Gautam and Sagar Adani in an alleged bribery case. Adani Group rejected the allegations as “baseless”, but that could not prevent a 20% decline in share prices. Notably, Adani Green Energy, the group-owned subsidiary at the center of these allegations, recovered all losses within seven trading days after news of the allegations broke. Important aspects of the case, including whether Adani can be prosecuted in the US, are still unclear. However, it remains in the headlines due to constant politics over this issue. Hindenburg-SEBI chief Madhabi Puri Buch controversy Hindenburg Research has also hit out at Securities and Exchange Board of India (SEBI) chairperson Madhabi Buch, alleging that she and her husband have stakes in shadowy offshore funds linked to the Adani money siphoning scam. In a blog post, Hindenburg claimed that these entities, controlled by Vinod Adani, brother of Adani Group Chairman Gautam Adani, were used to round-trip funds and inflate stock prices. The US short-seller said the couple’s investments were in Bermuda and Mauritius funds that were involved in alleged Adani wrongdoings. Hindenburg cited whistleblower documents indicating that Madhabi Buch’s husband Dhaval Buch had, in 2017, just before his SEBI appointment, written to a fund administrator in Mauritius asking him to have sole control over his offshore accounts. The report also points to documents linking Buch to the complex fund structure used by Vinod Adani. The allegation comes 18 months after Hindenburg’s report on Adani, which accused the group of manipulating shares and inflating revenues. SEBI chief denied the allegations. While the government seems to be in no hurry to go after Butch, the opposition is in no mood to let the matter rest, and the news is very much alive in discussions. RBI bans Paytm Payments Bank In February 2024, the Reserve Bank of India took action against Paytm Payments Bank Limited, freezing most of its operations due to concerns of money laundering and alleged irregularities in its financial transactions. The action was taken following reports of widespread non-compliance with Know Your Customer norms, with thousands of accounts linked to the same PAN and many transactions exceeding regulatory limits. The RBI actions included suspending PPBL’s ability to accept deposits, conduct credit transactions or top-up customer accounts, wallets and prepaid instruments after February 29, 2024. RBI had earlier flagged the bank for KYC and anti-money laundering violations, which continued despite multiple warnings. In March 2022, the RBI imposed restrictions on PPBL, barring it from adding new customers and ordered a comprehensive audit. The Enforcement Directorate (ED) had also raided PPBL and its parent company One97 Communications in 2022, investigating allegations of digital fraud and money laundering under the Prevention of Money Laundering Act (PMLA). After the RBI decision (in February 2024), Paytm’s share price fell by 40%, and its market capitalization declined by more than Rs 17,000 crore in just two days. SEBI bans Anil Ambani for 5 years The Securities and Exchange Board of India (SEBI) has barred former Reliance Home Finance (RHFL) chairman Anil Ambani and 24 other entities from the securities market for five years. The decision was taken by SEBI following findings of fund diversion and fraudulent activities at RHFL, where Ambani and other officials were allegedly involved in siphoning off funds through loans to entities linked to them. According to the case made by the regulator, despite instructions by the RHFL board to stop such practices, the management ignored these orders, leading to governance failure. SEBI’s investigation revealed that Ambani used his position in ADA Group and indirect shareholding in RHFL to sanction loans to companies with minimum assets, raising suspicion of fraud. This led to RHFL defaulting on its debt obligations, which resulted in its resolution under the RBI framework. Public shareholders suffered huge losses, with the company’s share price falling from Rs 59.60 in March 2018 to just Rs 0.75 by March 2020. SEBI also imposed a fine of Rs 25 crore on Ambani and other officials and entities involved in the scheme. Godfrey Phillips family inheritance battle The family dispute over Godfrey Phillips’s Rs 11,000 crore inheritance took a new turn in 2024, when Sameer Modi, one of the three children of late patriarch KK Modi, along with his brother Lalit Modi, handed over the management of the inheritance to their mother Bina Modi. Challenged with. The controversy revolves around the execution of a trust deed that KK Modi had created before his death in 2019. Sameer Modi accused Bina Modi of not distributing the family assets as stipulated in the trust deed and of exercising undue control over Godfrey Phillips. The inheritance includes the Modi family’s nearly 50% stake in Godfrey Phillips, worth more than Rs 5,500 crore, as well as shares in other Modi group companies. According to Sameer Modi’s lawyers, the trust deed envisages equal division of the inheritance among the three children, with an option to dissolve the trust if any member objects
