Regulatory body finds no merit in claims against Gautam Adani’s conglomerate, affirming its integrity and transparency.
The Securities and Exchange Board of India (SEBI) has cleared the Adani Group of allegations raised by the United States-based Hindenburg Research. The regulator stated that it found no basis for the claims that the conglomerate had engaged in misconduct, specifically regarding the routing of funds through three entities to conceal related-party transactions. In its assessment, SEBI confirmed that there was no question of devolvement of any liability on the Adani Group, and it did not impose any penalties.
The allegations under scrutiny involved Adicorp Enterprises Private Limited, Milestone Tradelinks Private Limited, and Rehvar Infrastructure Private Limited, which were reportedly utilized to channel funds from various Adani Group companies to support Adani Power and Adani Enterprises. SEBI concluded that these transactions did not meet the criteria for related-party dealings, a definition that was expanded following a 2021 amendment. The investigation revealed that loans were repaid with interest, negating any claims of siphoning off funds or engaging in fraudulent practices.
The inquiry was initiated after Hindenburg Research published a report in January 2023, alleging that the Adani Group was involved in stock manipulation, accounting fraud, and money laundering. This report significantly impacted the stock prices of the conglomerate’s seven publicly listed companies, which collectively saw a decline exceeding $100 billion in market valuation. Following the fallout, the Supreme Court directed SEBI to conduct a thorough investigation into these claims.
After the release of SEBI’s orders, Gautam Adani expressed his satisfaction with the findings, asserting that the regulator’s conclusions align with the group’s long-standing position that the Hindenburg allegations were unfounded. He emphasized that transparency and integrity have always been core principles of the Adani Group. In his remarks on social media, Adani expressed empathy for the investors who incurred losses due to what he termed a fraudulent and motivated report. He asserted that those who propagated false narratives owe an apology to the nation.
The resolution of this matter by SEBI marks a significant moment for the Adani Group, as it seeks to restore investor confidence and affirm its commitment to ethical business practices. The conglomerate has faced intense scrutiny and pressure since the allegations emerged, and the clarity provided by SEBI’s investigation could pave the way for recovery and growth in the coming months.
