Adani-Hindenburg Case: SC directs Sebi to complete probe within 3 months without fail
Adani-Hindenburg Case Verdict: The Supreme Court delivered its judgment today on numerous petitions seeking an investigation into accusations of accounting fraud and stock manipulation against Adani group companies. These allegations were outlined in a research report by US short-seller Hindenburg Research in January 2023.
Chief Justice DY Chandrachud pronounced the verdict, underscoring the court’s inability to interfere in regulatory affairs. The court asserted that the Adani-Hindenburg Case report cannot serve as the basis for a separate investigation. Instead, it directed the Securities and Exchange Board of India (SEBI) to proceed with its inquiry in accordance with the law.
Key Highlights of the Adani-Hindenburg Case:
- Hindenburg Research‘s report, unveiled in January 2023, made claims of “brazen accounting fraud” and “stock manipulation” by the Gautam Adani-led group.
- Despite Adani dismissing the report as “unresearched” and “maliciously mischievous,” it triggered a substantial decline in Adani group stocks, resulting in a loss of over $140 billion within days and the cancellation of a ₹20,000 crore share sale.
- In March, the Supreme Court constituted a six-member panel, led by retired Supreme Court judge AM Sapre, to investigate regulatory lapses by SEBI and alleged violations of laws by the Adani group. The committee’s report, submitted two months later, stated that the allegations of stock price manipulation or MPS norms violation by Adani group companies could not be substantiated “at this stage.”
- Concurrently, the panel raised concerns regarding the existing Foreign Portfolio Investors (FPI) regulations.
- In November, the Supreme Court expressed that, lacking evidence of lapses on SEBI’s part, which is already probing the matter, it would be inappropriate for the court to appoint a Special Investigation Team (SIT) to scrutinize alleged violations of MPS norms by Adani group companies.
