Adani Group Cleared by SEBI After Hindenburg Report on Stock Manipulation

India's markets regulator, the Securities and Exchange Board of India (SEBI), has dismissed allegations of stock manipulation leveled by U.S.-based short-seller Hindenburg Research against billionaire Adani and his group companies, including Adani Ports and Adani Power.

The controversy began when Hindenburg Research, a well-known financial research and short-selling firm, published a report claiming that Adicorp Enterprises Pvt. Ltd., a company under the Adani Group, was allegedly used to route funds from various Adani entities to Adani Power. According to the report, four Adani group companies lent Adani Power a total of ₹6.2 billion ($87.4 million) in 2020 through Adicorp, and these transactions were not disclosed in the financial statements of the lending companies, several of which are publicly listed.

Hindenburg alleged that Adicorp subsequently used this capital to provide unsecured loans amounting to ₹6.1 billion ($86 million) to Adani Power, raising concerns of potential stock manipulation and financial misrepresentation.

Following the publication, SEBI conducted a detailed investigation to determine whether these transactions violated the Listing Obligations and Disclosure Requirements (LODR) or constituted material misrepresentation under the SEBI Act. After examining the matter thoroughly, SEBI concluded that the transactions in question did not qualify as related-party transactions and found no evidence of any regulatory violations. Consequently, the regulator disposed of the proceedings against the Adani Group entities and individuals named in the report without taking further action.

The Adani Group has consistently denied any wrongdoing, asserting that its financial and operational practices are transparent and fully compliant with all legal and regulatory standards.

For Hindenburg, the dismissal of its allegations by SEBI represents a setback to its claims against the Adani Group in India. While the firm had sought to highlight alleged irregularities to influence stock movements, SEBI's findings effectively cleared the Adani Group of the alleged misconduct, reaffirming the legality of its transactions.

This development provides significant relief to the Adani Group, ending months of scrutiny following the Hindenburg report, and underscores SEBI's role in thoroughly evaluating market allegations before taking regulatory action.