Monday, May 20

Adani Group: SEBI Appeals to Supreme Court for 15-Day Extension to Conclude Adani Group-Hindenburg Probe

An important update on the Adani Group vs. Hindenburg Research situation: Back in May of this year, the Supreme Court set a deadline for the capital markets regulator to provide an updated status report on the matter by August 14th. This means that there’s a significant development expected soon regarding the ongoing situation between the Adani Group and Hindenburg Research.

On Monday, the Securities and Exchange Board of India (SEBI), which oversees the capital markets, requested the Supreme Court for an additional 15 days to wrap up its investigation into the claims made by US-based short-seller Hindenburg Research against the Adani Group. This conglomerate, led by Gautam Adani, is involved in various sectors from ports to power. SEBI also asked for an extension to the deadline for submitting their progress report on the matter.

Back in May of this year, the Supreme Court set a specific deadline for the capital markets regulator. They were required to provide an updated status report on the matter by August 14. The bench, led by Chief Justice of India (CJI), acknowledged the importance of the matter at that time. The issue revolves around concerns raised by Hindenburg about the non-compliance of minimum public shareholding (MPS) norms.

In its most recent communication, the capital markets regulator informed the Supreme Court that it’s currently in a waiting mode for information from foreign agencies in certain instances. Additionally, it mentioned that reports are undergoing approval by the appropriate authority in a few cases. This update sheds light on the ongoing efforts to gather necessary details and ensure the accuracy of the investigation.

What progress has the SEBI’s investigation into Hindenburg’s allegations made against the Adani Group so far?

In its recent submission, SEBI stated that it has thoroughly looked into 24 cases related to the matter. Among these, 17 cases have reached their conclusion and are considered finalized. These investigations have received the necessary approval from the competent authority, aligning with SEBI’s established practices and protocols.

SEBI also mentioned that it has reached out to foreign agencies and regulators to gather information in certain instances. Out of the seven outstanding cases, one case’s investigation has been concluded using the collected material. The regulatory body also emphasized that it has formulated an interim report, which has received approval from the appropriate authority.

Regarding four additional cases, the findings have been solidified, and the corresponding reports have been formulated. These reports are currently undergoing the approval process by the competent authority. Among the remaining two cases, one is at an advanced stage of investigation, while the other is in the process of having an interim report created based on the information gathered by SEBI up to this point.

What are Hindenburg’s allegations against Adani Group?

In a report unveiled in January of this year, Hindenburg Research leveled serious allegations against the Adani Group. The accusations included claims of stock manipulation, involvement in fraudulent transactions, and various financial wrongdoings. The report also pointed fingers at the company for purportedly utilizing offshore entities in tax haven regions to manipulate both share prices and financial outcomes. Additionally, the Hindenburg report raised concerns about potential violations of disclosure and shareholding regulations.

Addressing the allegations put forth by Hindenburg, Gautam Adani spoke to shareholders during the 2023 Annual General Meeting (AGM), stating that the report was essentially a blend of deliberate misinformation intended to harm the reputation of the conglomerate.

He went on to emphasize that the release of the report, strategically timed before the company’s follow-on-public offer (FPO), was orchestrated with the intention of tarnishing the Adani Group’s reputation and ultimately benefiting from a reduction in its stock prices.

“The report by Hindenburg was a malicious attempt aimed at damaging Adani and the group’s image. Subsequently, despite a fully subscribed FPO, we decided to return the money to investors to protect their interests,” Adani said.

 

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