Hindenburg Allegations Demolished: Mahesh Jethmalani On SEBI Clean Chit To Adani Group

Senior advocate and Rajya Sabha MP Mahesh Jethmalani on Thursday welcomed the Securities and Exchange Board of India's clean chit to the Adani Group, terming the Hindenburg Research allegations as an orchestrated campaign.

Speaking after the market regulator's findings, Jethmalani told NDTV Profit that the said episode was an "attempt to target a particular corporate entity", and claimed that "foreign forces were utilised" to amplify the hype around Hindenburg's report.

He added that the allegations against the Adani Group have now been demolished, and that that Indian markets had shown resilience throughout the controversy. "The clear message is Indian markets are resilient and Indian regulatory bodies are robust," Jethmalani said.

The former BJP MP further argued that accountability must lie with those spreading false charges. "The remedy is to go after those who make false allegations," he said, adding that SEBI's closure of the probe reinforced confidence in domestic regulatory institutions.

The markets regulator had, earlier on Thursday, said in its final order that allegations against the Adani Group over the Hindenburg case could not be established.

SEBI imposed no penalty, and cleared Adani Ports & Special Economic Zone Ltd., Adani Power Ltd., and Adani Enterprises Ltd. of any liabilities. Adani Group Chairperson Gautam Adani and Adani Enterprises Managing Director Rajesh Adani were also cleared.

No liabilities were also found on Jugeshinder Singh, Milestone Tradelinks Pvt. Ltd. and Rehvar Infrastructure Pvt. Ltd.

As per the SEBI order, no violation was found on account of related-party transactions. The market watchdog also found no manipulative transactions or unfair trade practices.

Hindenburg had alleged that this structure was meant to disguise related party transactions and bypass disclosure rules as well as to manipulate the market in violation of SEBI’s norms.

SEBI, however, held that the transactions in question did not qualify as related party transactions under the regulations in force at the time.

The broader definition of related party transactions was introduced only through a 2021 amendment, which came into effect from April 1, 2022, with a glide path until April 1, 2023. Since this amendment was prospective, it could not be applied to past transactions.

The market watchdog further found that the loans were bona fide, as the money was repaid with interest and there was no diversion or siphoning of funds. In the absence of related party violations, there was no basis to allege fraud, manipulation, or unfair trade practices regulations.