Supreme Court committee gives clean chit to Adani Group on Hindenburg allegations

A Supreme Court-appointed committee of experts examining the Hindenburg allegations has given a clean chit to the Adani Group and has said it appears there was no regulatory failure on the part of market regulator SEBI.

The experts’ committee said there was no price manipulation on the part of the Adani Group and that the conglomerate had taken necessary steps to comfort retail investors. The mitigating measures taken by the group had helped in building confidence in the stock and the stocks are stable now, the committee observed.

“At this stage, taking into account the explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation,” the committee of domain experts said in the report submitted to the Supreme Court.

SEBI revealed that several entities took short positions prior to the publication of Hindenburg’s report and benefitted by squaring off their positions as the prices plummeted. This needs to be investigated, the report states.

According to the committee, the market has re-priced and re-assessed Adani stocks. “While they may not have returned to pre-January 24 levels, they are stable at the newly re-priced level,” the report stated.

According to empirical data, retail investors’ exposure to Adani equities grew after January 24, 2023. Based on this, it was found that the Indian stock market as a whole was not unusually volatile during the reference period, the report added.

Key findings of the Supreme Court Committee:

*Adani Group has disclosed all beneficial owners

*No charge by SEBI that they are rejecting Adani’s declaration of beneficial owners.

*Retail shareholding of Adani has gone up after Hindenburg report.

*No prima facie violation of existing rules or laws found.

*There were short selling profits made by some entities after the Hindenburg allegations which need to be investigated.