SEBI Clears Adani Group in Hindenburg Case

The Securities and Exchange Board of India (SEBI) has given a clean chit to the Adani Group in the Hindenburg case. The regulator stated that the allegations made by the US-based short-seller could not be proved. As a result, no penalty or liability will be imposed on the group.

In January 2023, Hindenburg Research released a report accusing the Adani Group of stock manipulation, accounting irregularities, and hiding related-party transactions through shell companies. This triggered a huge sell-off in Adani shares, wiping out more than -$100 billion in market value. The Supreme Court then asked SEBI to conduct a detailed probe into the charges.

According to SEBI’s findings, the loans and fund transfers between Adani companies and intermediaries like Milestone and Rehvar were genuine business transactions. These loans, along with interest, were later repaid. Hence, they did not fall under the definition of “undisclosed related-party transactions” at the time. SEBI also clarified that the expanded rules on indirect transactions came into effect only from April 2022, and applying them retrospectively would not be legally correct.

The order mentioned that there was no evidence of fund diversion, siphoning of money, or loss to investors. “The allegations made against the noticees are not established,” SEBI concluded. The regulator also stressed that related-party transactions are not illegal if they are properly disclosed and approved.

This decision brings major relief to the Adani Group, which has faced strong criticism and global attention since the Hindenburg report. While the group consistently denied the allegations, the ongoing investigation had kept investors cautious.

However, SEBI’s closure of this case does not end all scrutiny of the group. Other probes, including those related to overseas investments and bribery allegations, are still being examined.