India’s markets regulator, the Securities and Exchange Board of India (Sebi), on Thursday cleared the Adani Group and its Chairman, Gautam Adani, of all allegations made by US-based short-seller Hindenburg Research regarding the alleged misuse of funds and concealment of related party transactions, reported the PTI.
In 2023, Hindenburg Research released a damning report accusing the Adani Group of stock manipulation, misuse of offshore tax havens, and artificially inflated valuations. The report claimed that Gautam Adani, the group’s chairman, had amassed over USD 100 billion in wealth over the previous three years, primarily due to a dramatic rise in the share prices of the group’s seven main listed companies, which had reportedly surged by an average of 819 per cent during that time.
Following the allegations, the Adani Group strongly denied all claims, describing them as `baseless` and a `malicious attempt to undermine` the company’s reputation. The conglomerate alleged that Hindenburg Research’s report was motivated by financial self-interest, as the firm held a short position against Adani stocks, standing to profit if share prices declined.
In the wake of the controversy, the Sebi had initiated an investigation into both Hindenburg and the Adani Group to examine the validity of the claims and the nature of the transactions involved.
According to the PTI, in two separate orders, the regulator found no violations, noting that at the time such transactions with unrelated parties did not qualify as related party dealings (the definition was expanded only after a 2021 amendment).
The regulator also noted that loans involved in the transactions were repaid with interest, no funds were misappropriated, and there was no evidence of fraud or unfair trade practices.
The allegations stemmed from a report published by Hindenburg Research in January 2023, which claimed that the Adani Group had used three entities — Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure — to route money internally between Adani-linked firms.
According to Hindenburg, was allegedly done to circumvent rules on related party transactions and potentially mislead investors.
Sebi`s investigation has found no merit in these claims under the legal framework applicable at the time of the transactions.
(with PTI inputs)
