SEBI Dismisses Hindenburg’s Allegations Against Adani Group; Finds No Violations

The Stock and Exchange Board of India (SEBI) has cleared the allegations made by Hindenburg Research, a U.S.-based investment research firm, against Adani Group and its chairman, Gautam Adani.

Hindenburg Research on January 24, 2023, claimed that the Adani Group was involved in stock manipulation and accounting fraud and was using tax-free countries and shell companies to funnel money around. It alleged that the funds were routed through Adani entities using multiple havens and then reinvested into Adani companies to manipulate stock prices upward. However, the Adani Group strongly denied the claims, saying they were false and made with vested intentions.

SEBI found that the allegations made against the Adani Group are not proven. It was observed that at the time, transactions with unrelated parties were not treated as related party transactions. The meaning of ‘related party transaction‘ was enhanced after a 2021 amendment. Therefore, the impugned transactions cannot be considered as “related party transactions.”

SEBI further held that such transactions cannot be treated as “manipulative or fraudulent transactions or unfair trade practices.” Since the allegations are not proven, SEBI said that there is no point in holding them responsible or imposing any penalty.