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Adani-Hindenburg case: Risks for Gautam Adani still not over as other SEBI probes continue
SEBI has cleared only two charges in the Adani-Hindenburg case, 22 others are pending, including those on minimum public shareholdings guidelines.
SEBI is still investigating the Adani-Hindenburg case, according to people familiar with the matter, signaling that the conglomerate led by founder billionaire Gautam Adani has received only a partial reprieve from India’s market regulator.
There are some pending investigation strands, such as whether Adani Group has followed minimum public shareholdings guidelines, one of the people said. At least three to four cases are still being examined, another person said. These people spoke on the condition of anonymity as the information is not public.
The Securities and Exchange Board of India has not yet received responses from some stakeholders related to these cases, one person added.
While there’s nothing to indicate whether the ports-to-power conglomerate will face any fines or regulatory censure on the matters pending before SEBI, it means that there’ll likely be more SEBI orders on the Adani Group.
Adani Group didn’t immediately respond to an email seeking comment.
The billionaire-founder also remains indicted by the US Department of Justice last year in an alleged $250-million bribery scheme. Adani’s efforts to get those charges resolved have stalled in recent months as Washington and New Delhi have clashed on issues like trade, Russian oil and India’s conflict with Pakistan.
Adani Group Stocks
Billionaire Adani and the investors cheered Sebi’s latest orders—only two charges have been cleared against Adani Group firms, 22 other orders are pending. The combined market cap of Adani Group companies rose by more than $6 billion to $156 billion as all the conglomerate’s listed firms rallied.
There is no evidence that the Adani Group used related-party transactions to route funds into its listed units, SEBI said in two separate orders (here and here) published on its website on Thursday. The Ahmedabad-based conglomerate had repeatedly denied the allegations first made by Hindenburg Research in January 2023.
Sebi “has reaffirmed what we have always maintained, that the Hindenburg claims were baseless,” Asia’s second-richest person said in a post on X, formerly Twitter, on Thursday.
Adani-Hindenburg Case: A Timeline
The scathing January 2023 report by the US short-seller that has since disbanded had alleged large-scale corporate fraud, triggering a stock rout that at one point eroded over $150 billion market cap for the listed Adani entities and halted Adani’s debt-fueled expansion spree.
It also led to the Supreme Court of India asking the market regulator to probe Hindenburg’s accusations against the conglomerate.
The scope of the investigation spanned potential violations of minimum public shareholding rules in Adani Group firms, stock price manipulation through the foreign portfolio investment route and allegations of insider trading.
It also included 13 matters on related-party transactions, SEBI said in its status report to the court in August 2023. SEBI’s Thursday order cleared Adani on two of these related-party transaction investigations.
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Adani Group in recent months has begun clawing back some of the ground it lost in the aftermath of the Hindenburg report and the DOJ indictment. It has secured funding from marquee investors and is back to planning multi-billion-dollar expansion plans, despite the regulatory overhangs at home and overseas.
