The Crossbill News Desk
The Securities and Exchange Board of India (Sebi) has cleared Gautam Adani, his brother Rajesh Adani, and key Adani Group firms — Adani Ports & SEZ, Adani Power, and Adicorp Enterprises — of all charges levelled by US short-seller Hindenburg Research.
After a claimed detailed probe, the regulator concluded that allegations of insider trading, market manipulation, and violations of public shareholding rules could not be substantiated.
In its findings, Sebi said that none of the charges in the show-cause notice stood proven and that there was no breach of the Sebi Act relating to fraudulent or unfair trade practices.
Transactions under scrutiny were deemed genuine business dealings and not fraudulent or violative of related-party disclosure norms, based on the legal framework that applied during the period of investigation. The clean chit was given through two separate orders.
Hindenburg Research, in its January 24, 2023 report, had accused the Adani Group of executing “the largest corporate fraud in history,” alleging stock manipulation, accounting irregularities, and the use of offshore shell companies to inflate share prices.
The report also flagged possible violations of public shareholding norms and raised concerns about debt levels and related-party transactions.
The charges triggered a massive market rout, with Adani Group’s market capitalisation plunging by around $150 billion and flagship Adani Enterprises losing 70 per cent of its value. Earlier this year, Hindenburg founder Nate Anderson announced the “disbandment” of the short-selling firm.
“Having considered the matter holistically, I find that the allegations made against Noticees (Adani group firms and officials) in the show-cause notice (SCN) are not established. Considering the above, the question of devolvement of any liability on Noticees does not arise and hence the question of determination of quantum of penalty also does not require any deliberation,” Sebi’s whole-time member Kamlesh Varshney stated in the order.
“I hereby dispose of the instant proceedings against Noticees without any direction,” he added.
The regulator clarified that on merit, the transactions under question could not be categorised as manipulative, fraudulent, or unfair trade practices.
There was no evidence of siphoning off funds or diversion of money, Sebi noted, adding that all loans in question, along with interest, were fully repaid before the probe began. Moreover, the transactions were not classified as related-party transactions. The show-cause notice itself did not present any evidence beyond the issue of non-classification, Sebi observed, which could not sustain a finding of fraud.
Hindenburg had specifically alleged that Adicorp Enterprises was used as a conduit to channel funds from Adani group companies to publicly listed Adani Power Ltd.
Its report claimed that four Adani Group companies lent Rs 620 crore to Adicorp in 2020, transactions that were not disclosed in the lenders’ financial statements. Similar allegations were made about Milestone Tradelinks (MTPL) and Rehvar Infrastructure being used as intermediaries to route funds, sidestepping disclosure norms.
Sebi’s notice had charged violations of directors’ duties and the Listing Obligations and Disclosure Requirements (LODR). However, the regulator found that while funds were rotated through Milestone and Rehvar, the loans were genuine, interest-bearing, and repaid in full.
Importantly, at the time, Sebi’s definition of related-party transactions under LODR did not extend to such indirect dealings. The broader amendments introduced in 2021 came into effect only in April 2023 and could not be applied retrospectively.
As a result, allegations against Gautam Adani, Rajesh Adani, and the group’s CFO Jugeshinder Singh were not upheld, with Sebi concluding that there was no evidence of deliberate concealment or fraud. The regulator acknowledged that while the use of intermediaries raised governance questions, it did not constitute a violation of the rules applicable between FY 2018–23. With this, Sebi closed the case.
Responding to the order, Adani Group Chairman Gautam Adani said that the findings confirmed what the conglomerate had maintained from the beginning — that the Hindenburg allegations were “baseless.”
In a post on X, he wrote, “Transparency and integrity have always defined the Adani Group. We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report. Those who spread false narratives owe the nation an apology. Our commitment to India’s institutions, to India’s people and to nation building remains unwavering.”
After a claimed detailed probe, the regulator concluded that allegations of insider trading, market manipulation, and violations of public shareholding rules could not be substantiated.
In its findings, Sebi said that none of the charges in the show-cause notice stood proven and that there was no breach of the Sebi Act relating to fraudulent or unfair trade practices.
Transactions under scrutiny were deemed genuine business dealings and not fraudulent or violative of related-party disclosure norms, based on the legal framework that applied during the period of investigation. The clean chit was given through two separate orders.
Hindenburg Research, in its January 24, 2023 report, had accused the Adani Group of executing “the largest corporate fraud in history,” alleging stock manipulation, accounting irregularities, and the use of offshore shell companies to inflate share prices.
The report also flagged possible violations of public shareholding norms and raised concerns about debt levels and related-party transactions.
The charges triggered a massive market rout, with Adani Group’s market capitalisation plunging by around $150 billion and flagship Adani Enterprises losing 70 per cent of its value. Earlier this year, Hindenburg founder Nate Anderson announced the “disbandment” of the short-selling firm.
“Having considered the matter holistically, I find that the allegations made against Noticees (Adani group firms and officials) in the show-cause notice (SCN) are not established. Considering the above, the question of devolvement of any liability on Noticees does not arise and hence the question of determination of quantum of penalty also does not require any deliberation,” Sebi’s whole-time member Kamlesh Varshney stated in the order.
“I hereby dispose of the instant proceedings against Noticees without any direction,” he added.
The regulator clarified that on merit, the transactions under question could not be categorised as manipulative, fraudulent, or unfair trade practices.
There was no evidence of siphoning off funds or diversion of money, Sebi noted, adding that all loans in question, along with interest, were fully repaid before the probe began. Moreover, the transactions were not classified as related-party transactions. The show-cause notice itself did not present any evidence beyond the issue of non-classification, Sebi observed, which could not sustain a finding of fraud.
Hindenburg had specifically alleged that Adicorp Enterprises was used as a conduit to channel funds from Adani group companies to publicly listed Adani Power Ltd.
Its report claimed that four Adani Group companies lent Rs 620 crore to Adicorp in 2020, transactions that were not disclosed in the lenders’ financial statements. Similar allegations were made about Milestone Tradelinks (MTPL) and Rehvar Infrastructure being used as intermediaries to route funds, sidestepping disclosure norms.
Sebi’s notice had charged violations of directors’ duties and the Listing Obligations and Disclosure Requirements (LODR). However, the regulator found that while funds were rotated through Milestone and Rehvar, the loans were genuine, interest-bearing, and repaid in full.
Importantly, at the time, Sebi’s definition of related-party transactions under LODR did not extend to such indirect dealings. The broader amendments introduced in 2021 came into effect only in April 2023 and could not be applied retrospectively.
As a result, allegations against Gautam Adani, Rajesh Adani, and the group’s CFO Jugeshinder Singh were not upheld, with Sebi concluding that there was no evidence of deliberate concealment or fraud. The regulator acknowledged that while the use of intermediaries raised governance questions, it did not constitute a violation of the rules applicable between FY 2018–23. With this, Sebi closed the case.
Responding to the order, Adani Group Chairman Gautam Adani said that the findings confirmed what the conglomerate had maintained from the beginning — that the Hindenburg allegations were “baseless.”
In a post on X, he wrote, “Transparency and integrity have always defined the Adani Group. We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report. Those who spread false narratives owe the nation an apology. Our commitment to India’s institutions, to India’s people and to nation building remains unwavering.”
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