Supreme Court Gives Clean Chit to Adani Group in Hindenburg Allegations

The Adani Group received a significant relief as an expert committee, appointed by the Supreme Court to examine the allegations made by US short-seller Hindenburg Research, concluded that it was inconclusive to determine whether there had been regulatory failure in relation to the accusations of stock price manipulation.

In response to a report by US short-seller Hindenburg Research, which accused the Adani Group of fraud, stock market manipulation, and improper use of offshore entities, the Supreme Court had appointed a committee to investigate the matter.

According to the report from the expert committee, the Indian stock market did not experience excessive volatility after January 24, when Hindenburg released its incriminating report.

The expert panel stated that the Adani Group's implementation of mitigating measures had effectively restored confidence in the stock, resulting in its current stability.

There was no apparent pattern of aggressive trading detected

In its recent submission of findings to the Supreme Court, the committee revealed that SEBI (Securities and Exchange Board of India) had identified certain entities that had taken a short position before the release of the Hindenburg report and subsequently profited when the stock price plummeted following the report.

The committee did not discover any recurring instances of artificial trading or wash trades involving the same parties.

According to the committee, no clear pattern of abusive trading was discovered and there was no regulatory failure relating to Minimum Public Shareholding and no violation of compliances.

The committee declared unequivocally that the regulator had failed to demonstrate that its suspicions could be turned into a solid case for prosecuting a violation accusation.

Prior to the release of Hindenburg report, multiple entities had placed short positions

According to the committee, foreign portfolio investors in Adani Group equities are in compliance with SEBI laws.

SEBI was tasked with investigating the allegations of price manipulation in Adani stocks in relation to the Hindenburg report. 

The committee refrained from commenting on the merits of the issue, as SEBI's investigation into the matter is still ongoing. It was noted that several entities had taken short positions before the release of the Hindenburg report.