SEBI states ‘no violations’ by Adani Group in Hindenburg case
The financial research firm accused the Indian conglomerate of stock manipulation and improper use of offshore tax havens
The Securities and Exchange Board of India (SEBI) has dismissed the allegations made by US-based short-seller Hindenburg Research, stating that it found no breach of regulatory norms by the Adani Group of companies.
The order of SEBI’s Whole-Time Member Kamlesh Chandra Varshneya read, “I find that the allegations made against the noticees in the show-cause notice are not established. Considering that, the question of devolvement of any liability on the noticees does not arise. Hence, the question of determination of quantum of penalty also does not require any deliberation.”
The markets watchdog also disposed of the instant proceedings against group companies Adani Ports, Adani Power, and its Chairman Gautam Adani.
In 2023, Hindenburg published a report accusing the Adani Group of stock manipulation, improper use of offshore tax havens, and inflated valuations.
Alleging that the group was funded through entities Milestone Tradelinks, Rehvar Infrastructure, and Adicorp Enterprises, the report questioned the source of funds routed through these companies. It suggested that they were used as conduits to conceal related-party transactions.
However, in defence, the Adani Group argued that the transactions were genuine commercial dealings, fully repaid with interest, and undertaken in compliance with the laws applicable at that time. It also clarified that Milestone and Rehvar were not ‘related parties.’
After observing the submissions, SEBI ruled that all loans and repayments were paid in full and with interest, and that the transactions did not constitute violations of the SEBI Listing Obligations and Disclosure Requirements Regulations and the Prohibition of Fraudulent and Unfair Trade Practices Regulations.
The market regulator also noted that amendments to broaden the definition of related-party transactions came into effect only from April 2023 and could not be applied retrospectively.
The order further stated, “Since the transactions do not fall in the definition of ‘related party transactions’, the allegation against noticee numbers 7 and 8 to have aided and abetted or facilitated the Adani Group of companies in alleged circumvention of the applicable law, is baseless.”
Reacting to the ruling, the group chief, Adani, expressed that SEBI reaffirmed what we have always maintained, that the Hindenburg claims were baseless.
He added, “We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report. Those who spread false narratives owe the nation an apology.”