Adani-Hindenburg Case Verdict: The Supreme Court has rejected petitions seeking a probe by a Special Investigation Team into the accusations against the Adani Group by Hindenburg research. The Securities and Exchange Board of India (SEBI) is currently probing the matter.
The Supreme Court said there are no grounds to transfer the investigation to a SIT or any other agency. While saying it cannot enter into SEBI's domain, the top court has instructed it to complete the probe in 3 months
Chief Justice of India DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, formed the three-judge bench that delivered this judgment.
The CJI clarified that there were no substantial reasons to instruct SEBI to reverse its amendments on Foreign Portfolio Investor (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations. "SEBI has wrapped up inquiries in 20 out of 22 cases. Considering the Solicitor General's assurance, we instruct SEBI to conclude investigations in the remaining two cases within three months," the bench emphasized.
Moreover, the court ruled that the August report by OCCRP (Organized Crime and Corruption Reporting Project) could not be utilized to cast doubt on SEBI's investigations. "We dismiss the reliance on the OCCRP report. Depending on a third-party organization's report without proper verification cannot be accepted as evidence," stated the CJI.
On January 24, 2023, Hindenburg Research, a U.S.-based investment research corporation, released a damning report about the Adani Group. Following an exhaustive two-year investigation into the group's finances, transactions, and activities, Hindenburg alleged that the Indian conglomerate had executed a brazen stock manipulation and accounting fraud scheme spanning decades.
They claimed that this manipulation involved the use of offshore shell companies connected to Adani's family to artificially inflate the Adani Group's stock prices. The report's disclosure shook the markets, resulting in an unprecedented decline in the Adani Group's stock value.
Responding to the report, the Adani Group released a comprehensive 413-page rebuttal dismissing all findings and questions posed by Hindenburg. They claimed these were not based on independent or journalistic investigations. The Adani Group emphasized compliance with Indian laws and full disclosure to regulatory authorities across all their entities.
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