SEBI Final Order Clears Adani Group In Hindenburg Case, Finds No Merit In Allegations

The Securities and Exchange Board of India on Thursday said in its final order that allegations on the Adani Group over the Hindenburg case could not be established.

The regulator 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.

The case stemmed from Hindenburg’s Jan. 24, 2023 report, which alleged that Adani Group entities used private firms—Adicorp Enterprises Pvt. Ltd., Milestone Tradelinks, and Rehvar Infrastructure—as conduits to route funds into listed companies Adani Power and Adani Enterprises.

SEBI’s investigation traced loan transactions where Adani Ports extended funds to these private firms, which were then on-lent to Adani Power and Adani Enterprises. These loans, however, were later repaid with interest to the original lender.

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.

"After an exhaustive investigation, SEBI has reaffirmed what we have always maintained, that the Hindenburg claims were baseless. Transparency and integrity have always defined the Adani Group," Gautam Adani posted on X.

"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. Our commitment to India’s institutions, to India's people and to nation building remains unwavering," he added.

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