India’s financial world witnessed a major development as the Securities and Exchange Board of India (SEBI) gave a clean chit to Gautam Adani and the Adani Group after an extensive investigation into allegations raised by US-based short-seller Hindenburg Research. The regulator’s detailed order dismissed claims of stock manipulation, insider trading, and fund diversion, bringing relief to the conglomerate and its investors.
Following the announcement, Gautam Adani strongly hit back at critics, stating that those who spread false narratives and caused investors to suffer losses should apologise to India. His statement marks one of the most direct responses from the Adani Group since the controversy began in January 2023.
SEBI Clears Adani Group of Allegations
After months of scrutiny, SEBI released two separate orders addressing the charges levelled by Hindenburg. The regulator found no evidence of insider trading, manipulation of stock prices, or breach of public shareholding norms. Importantly, SEBI noted that there was no diversion of funds or siphoning of money by Gautam Adani, his brother Rajesh Adani, or Chief Financial Officer Jugeshinder Singh.
The order, authored by SEBI’s Whole-Time Member Kamlesh Varshney, stated:
“Having considered the matter holistically, I find that the allegations made against Noticees (Adani Group firms and officials) in the show-cause notice are not established. Considering the above, the question of devolvement of any liability does not arise.”
In simple terms, SEBI concluded that the accusations against the Adani Group were baseless and therefore closed the proceedings without imposing any penalties.
Gautam Adani: “Those Who Spread Lies Owe India an Apology”
Gautam Adani, Chairman of the Adani Group, took to X (formerly Twitter) soon after SEBI’s verdict. He expressed relief that the regulator had reaffirmed the group’s consistent stand that the Hindenburg allegations were untrue.
“After an exhaustive investigation, SEBI has reaffirmed what we have always maintained – that the Hindenburg claims were baseless. Transparency and integrity have always defined the Adani Group,” he wrote.
The billionaire further highlighted the emotional and financial toll the report had on ordinary investors.
“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.”
This statement reflects not only Adani’s personal frustration but also the larger sentiment within the Adani Group, which has long maintained that its operations are in compliance with Indian laws and regulations.
What Hindenburg Had Alleged
On January 24, 2023, Hindenburg Research published a bombshell report accusing the Adani Group of committing “the largest corporate fraud in history.” The firm alleged that the conglomerate engaged in stock price manipulation, accounting irregularities, and use of offshore shell entities to artificially inflate valuations.
Key accusations included:
- Use of related-party transactions to mask debt exposure.
- Offshore shell companies funneling money to boost share prices.
- Non-disclosure of loans and fund movements.
The impact was immediate and severe. The Adani Group’s market value plunged by nearly $150 billion within weeks, with Adani Enterprises’ stock alone falling almost 70%.
The report caused widespread panic among retail and institutional investors. Many questioned the transparency of India’s corporate ecosystem, while opposition parties used the allegations to target the government, citing the group’s perceived political closeness.
SEBI’s Findings: No Fraud, No Manipulation
SEBI thoroughly examined multiple transactions flagged by Hindenburg, including those involving Adicorp Enterprises, Milestone Tradelinks (MTPL), and Rehvar Infrastructure.
While Hindenburg claimed these firms were shell companies used to move money secretly between Adani Group entities, SEBI found otherwise. The regulator confirmed that:
- Loans routed through these entities were interest-bearing.
- All loans were repaid in full.
- Transactions did not violate disclosure norms that existed at the time.
Thus, SEBI concluded that the financial dealings of the Adani Group did not amount to unlawful or fraudulent activities.
Market Reaction to the SEBI Clean Chit
The SEBI order is expected to boost investor confidence in the Adani Group. The conglomerate’s stocks, which had already begun recovering in the past few months, may see further gains as uncertainty eases.
For the group, the clean chit is not just a regulatory relief but also a reputational victory. Since the Hindenburg report, Adani Group has consistently worked to reassure investors, bring in new capital, and reduce debt. The SEBI findings reinforce its claims of compliance and transparency.
Hindenburg’s Collapse Adds a Twist
Ironically, the firm that shook India’s markets is no longer operational. Earlier in 2024, Hindenburg’s founder Nate Anderson announced that the firm would be disbanded.
This twist adds another layer to the controversy. A firm that triggered billions of dollars in losses for Indian investors is now no longer accountable in the same way, making Adani’s call for an apology even more significant.
The Larger Impact on India’s Market and Reputation
The SEBI clean chit is more than a personal or corporate win for Gautam Adani. It has broader implications for India’s markets and regulatory credibility.
- Investor Sentiment: The decision may restore trust among retail and institutional investors, both domestic and foreign.
- Global Perception: Since Hindenburg’s report attracted international attention, SEBI’s detailed rebuttal strengthens India’s image as a market with strong regulatory oversight.
- Corporate Governance: The case has triggered debates on disclosure frameworks, related-party transactions, and debt transparency, pushing many Indian firms to tighten their governance practices.
Adani Group’s Road Ahead
With the controversy now behind it, the Adani Group is expected to refocus on expansion and new investments. The conglomerate has ambitious plans in renewable energy, infrastructure, ports, airports, and data centers.
In recent months, the group has:
- Secured new global investments, including from Middle Eastern sovereign wealth funds.
- Announced fresh green energy projects.
- Worked aggressively on reducing debt to reassure credit rating agencies.
The SEBI clean chit removes one of the biggest obstacles to the group’s growth journey.
A Reminder of Market Volatility
While the Adani Group has emerged stronger from this storm, the episode is a reminder of how quickly markets can react to external reports and short-seller strategies. For retail investors, it highlights the importance of verifying information and not reacting solely based on fear-driven news.
For regulators like SEBI, the case also serves as a blueprint for handling future market disruptions caused by external players.
The SEBI clean chit marks a turning point in the Adani-Hindenburg saga. By rejecting all allegations of fraud and manipulation, India’s market regulator has reaffirmed the Adani Group’s long-standing defense of transparency and compliance.
Gautam Adani’s strong statement calling for an apology reflects the emotional and financial pain the controversy caused. With the matter now settled, the Adani Group is poised to return to its growth trajectory, while India’s regulatory institutions emerge stronger and more credible.
Disclaimer: This article is for informational purposes only. It reflects publicly available details about SEBI’s findings and the Adani Group’s response. Readers are advised to do their own research before making financial decisions.
