Sebi Clears Adani Group of Hindenburg Allegations
The Securities and Exchange Board of India (Sebi) has cleared Gautam Adani and his group companies of allegations made by Hindenburg Research regarding stock manipulation. In a statement released on Thursday, Sebi found no evidence supporting claims that the Adani Group used related parties to funnel funds into publicly listed companies. The regulator emphasized that the transactions in question did not violate any listing agreements or regulations.
Sebi’s Investigation Findings
Sebi’s investigation focused on claims made by Hindenburg Research, which alleged that the Adani Group utilized entities like Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure to manipulate stock prices. The report, published on January 24, 2023, suggested that these companies acted as conduits for routing funds from various Adani Group firms to publicly traded entities such as Adani Power and Adani Enterprises. However, Sebi’s findings indicated that the transactions were legitimate loans. For instance, Adani Ports provided loans to Adicorp Enterprises, which subsequently loaned funds to Adani Power. The loans were repaid with interest, demonstrating a clear financial transaction rather than manipulation.
Adani Group’s Response
In response to Sebi’s findings, Gautam Adani expressed satisfaction on social media, stating that the investigation reaffirmed the group’s commitment to transparency and integrity. He characterized the allegations from Hindenburg as baseless and reiterated that the Adani Group has always operated within legal frameworks. The group had previously dismissed the Hindenburg report as a “malicious combination of selective misinformation” and maintained that the claims had been tested and rejected by the Supreme Court.
Background of the Allegations
The Hindenburg report emerged just as the Adani Group was preparing to launch a significant follow-on public offer worth ₹20,000 crore for Adani Enterprises. The report accused the group of engaging in extensive stock manipulation and accounting fraud over several years. Following the publication of the report, the Adani Group’s stock prices plummeted, leading to substantial losses for investors and igniting a political controversy. The group faced increased scrutiny from various regulatory bodies, including the U.S. Department of Justice and the Securities and Exchange Commission.
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