New Delhi, Sep 18 — In a major relief for the Adani Group, the Securities and Exchange Board of India (SEBI) on Thursday refuted allegations levelled by US short-seller Hindenburg Research, concluding that the conglomerate had not violated any regulatory provisions.
The market regulator stated that no fraud, misrepresentation, or siphoning of funds was proven against the group. Consequently, no penalties or liabilities have been imposed on Adani entities or individuals, with proceedings formally disposed of without directions.
SEBI’s findings
According to SEBI, the transactions questioned by Hindenburg did not qualify as “related party transactions” under regulations applicable at the time. “Reading of Listing Agreement and SEBI (LODR) Regulations reveals that transactions between a listed company with an unrelated party are not covered within the definition of ‘related party transactions’ as it existed during the time when impugned transactions took place, though included specifically after the 2021 amendment,” the regulator said.
SEBI clarified that the Supreme Court had also rejected pleas suggesting irregularities in the regulatory process, affirming that the framework was not tainted with illegality. The regulator further noted there was no violation of Section 12A of the SEBI Act or the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.
Industry reaction
Commenting on the outcome, a market expert said, “I think in many ways these two orders would strengthen the Adani Group’s profile and perception in the marketplace — amongst regulators, bankers, and the public. It should put an end to the negative perceptions carried about the group.”
Background of the case
In January 2023, Hindenburg Research published a report accusing the Adani Group of stock manipulation and accounting irregularities. The report triggered a steep decline in the conglomerate’s share prices, wiping out billions in market capitalisation.
At the time, the Adani Group strongly denied the allegations. Addressing shareholders at the Annual General Meeting (AGM) of Adani Enterprises that year, Group Chairman Gautam Adani said the company was “faced with baseless accusations made by a foreign short seller that questioned our decades of hard work.”
Conclusion
With SEBI’s clean chit, the Adani Group has secured significant regulatory backing after nearly two years of scrutiny following Hindenburg’s report. The ruling is expected to boost investor confidence and improve the conglomerate’s market perception, which had taken a hit in the aftermath of the 2023 allegations.