Sebi clears Adani of Hindenburg allegations

New Delhi, Sep 18: In a big boost to tycoon Gautam Adani, markets regulator Sebi on Thursday cleared the billionaire and his group of stock manipulation allegations made by US short-seller Hindenburg Research, saying fund transfer between group companies did not fall foul of any regulation.

The Securities and Exchange Board of India (Sebi) in two separate detailed orders said the allegations of insider trading, market manipulation, and violations of public shareholding norms were found to be unsubstantiated after a detailed investigation.

Hindenburg, which has since shut down, in January 2023 published a damning report against the Adani Group, alleging Adicorp Enterprises Pvt Ltd, Milestone Tradelinks Pvt Ltd, and Rehvar Infrastructure Pvt Ltd were used as a conduit to route funds from various Adani Group companies to fund publicly listed Adani Power Ltd and Adani Enterprises Ltd.

Sebi said fund transfer between the stated companies was loan which was repaid with interest in various tranches before the start of its investigation.

These transactions cannot be classified as related party transactions which require disclosure, as was alleged by Hindenburg.

There was no violation of Sebi’s disclosure norms as the transactions between Adicorp, Milestone Tradelinks, and Rehvar Infrastructure with the conglomerate’s firms did not meet the definition of a related party, Sebi board member Kamlesh C Varshney said in the two orders.

It also found no violations involving substantial acquisition of securities or control that could mislead investors.

As a result, Sebi concluded that there was no basis for assigning liability or imposing penalties on the Adani entities or executives.

Adani reacted to the clean chit by calling for an apology by those who spread false narratives using Hindenburg Research’s “fraudulent and motivated” report.

In a post on X accompanied by the national tricolour, Adani said the Sebi clean chit has reaffirmed what his group has always maintained -- “that the Hindenburg claims were baseless”.

“Transparency and integrity have always defined the Adani Group,” the Adani Group Chairman said. “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,” he said.

He signed off the post with, “Satyamev Jayate! JAI HIND!”