An investigation of India’s Adani group by the market regulator, SEBI, has uncovered violations of rules on disclosures by listed entities and limits on the holdings of offshore funds. The inquiry was launched following concerns raised by Hindenburg Research, which led to a significant decrease in the market value of the Adani group. The violations are said to be of a technical nature and would likely result in a monetary penalty once the investigation is complete.

India’s Supreme Court, overseeing SEBI’s investigation, is set to hear the matter soon. However, the report will not be made public until SEBI has passed its orders on the investigation. The Adani group and SEBI have not yet responded to requests for comment.

According to sources, one key finding of the investigation was violations in disclosing related-party transactions. Failure to identify and report such transactions could provide an incorrect picture of a listed company’s financials. The penalty for each violation by each entity could go up to a maximum of 10 million rupees ($121,000).

The investigation also revealed that holdings of offshore funds in some Adani companies were not in line with the rules. Indian law allows a maximum investment of 10% in an Indian company by an offshore investor. Any larger investment is classified as foreign direct investment.

The Adani group had previously denied any wrongdoing and stated that all related-party transactions had been fully identified and disclosed. It remains to be seen what penalties SEBI will eventually recommend in the investigation.