Sebi clears Adani of Hindenburg charge

The stock market regulator on Thursday cleared Adani Group and its top executives of allegations of bypassing related-party transaction rules levelled by Hindenburg Research, bringing the curtains down on an episode that has stretched out across 15 months.

- Neha Joshi

While Adani Group firms did route funds through three companies, as alleged by Hindenburg, these transactions were not illegal at the time they were made, the Securities and Exchange Board of India (Sebi) said. In two orders, signed by whole-time member Kamlesh Varshney, Sebi disposed of the proceedings against all noticees, which included Gautam Adani, his brother Rajesh Adani and Group chief financial officer (CFO) Jugeshinder Singh.

The Sebi investigation was triggered by a Hindenburg report in January 2023, which claimed that Adani Group companies used Adicorp Enterprises Pvt. Ltd, Milestone Tradelinks Pvt. Ltd, and Rehvar Infrastructure Pvt. Ltd as “conduit entities”. However, the group could not be penalized based on a 2021 amendment that was made after those transactions, Sebi said.

Adani group chairman Gautam Adani praised Sebi's ruling and expressed sympathy for investors impacted by the report. He demanded an apology from those who have spread false narratives.

In a post on the social media platform X, Gautam Adani wrote, "After an exhaustive investigation, Sebi has reaffirmed what we have always maintained, that the Hindenburg claims were baseless. 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." Legal experts said the decision highlights a loophole that existed previously.