SEBI Clears Adani of Hindenburg Allegations, Bringing Big Relief

In two separate detailed orders, the Securities and Exchange Board of India (Sebi) has dismissed the allegations of insider trading, market manipulation, and violations of public shareholding norms against billionaire Gautam Adani and his group. The accusations were initially made by US short-seller Hindenburg Research, which published a scathing report in January 2023, claiming that Adicorp Enterprises Pvt Ltd, Milestone Tradelinks Pvt Ltd, and Rehvar Infrastructure Pvt Ltd were used as channels to transfer funds from various Adani Group companies to publicly listed Adani Power Ltd and Adani Enterprises Ltd.

After a thorough investigation, Sebi found no evidence of related party transactions that violated the disclosure norms. Sebi board member Kamlesh C Varshney clarified that the transactions between Adicorp, Milestone Tradelinks, and Rehvar Infrastructure with the Adani Group companies did not meet the definition of a related party. Additionally, Sebi found no violations involving substantial acquisition of securities or control that could mislead investors, leading to the conclusion that there was no basis for assigning liability or imposing penalties on the Adani entities or executives.

The regulatory clearance from Sebi comes after months of intense scrutiny and speculation sparked by Hindenburg’s report, which caused a significant drop in the stock prices of Adani Group companies, erasing over USD 150 billion in market value at the lowest point. Despite these challenges, the Adani Group consistently denied all allegations presented in the report, and the stocks gradually regained their value after a broader index market correction.

Following Sebi’s decision, Gautam Adani took to social media to express his thoughts on transparency and integrity as defining characteristics of the Adani Group. He emphasized the baseless nature of the Hindenburg claims and acknowledged the investors who suffered losses due to the fraudulent allegations. In a tweet, Gautam Adani shared his gratitude for the regulatory clearance and reaffirmed the group’s commitment to transparency and integrity.

Previously, a Supreme Court-appointed expert panel had echoed Sebi’s findings, stating that there was no prima facie evidence of wrongdoing on the part of the Adani Group. This additional validation adds to the credibility of Sebi’s investigation and the exoneration of the Adani entities from the allegations brought forth by Hindenburg Research.