Adani SEBI clearance has given the Adani Group a partial victory, with India’s market regulator clearing the conglomerate of key allegations made by US short-seller Hindenburg Research.
India’s Securities and Exchange Board (SEBI) announced Thursday that there was no evidence of the Adani Group using related-party transactions to funnel funds into its listed companies. The finding marks a crucial reprieve for billionaire Gautam Adani’s business empire, which has been under regulatory and market pressure since early 2023.
SEBI’s Key Findings
According to SEBI’s two published orders, transactions between Adicorp Enterprises Pvt., Milestone Tradelinks Pvt., and Rehvar Infrastructure Pvt. with Adani Group companies did not meet the definition of related-party transactions under Indian disclosure norms.
Kamlesh C. Varshney, a SEBI board member, confirmed that no violation of disclosure requirements occurred, effectively clearing the group of this specific charge.
Hindenburg Report’s Impact
The Adani SEBI clearance addresses only part of the allegations first made in Hindenburg’s explosive January 2023 report, which accused the ports-to-power conglomerate of stock manipulation and accounting fraud. The report triggered a historic selloff, wiping out more than $150 billion in market value and forcing Indian regulators to launch a court-directed investigation.
Although Adani’s companies have recovered some market capitalization — reaching over $150 billion this week — they remain well below the pre-Hindenburg level of $235 billion.
Legal and Regulatory Overhang
While the SEBI ruling is a win for Adani, it does not clear all clouds. The conglomerate continues to face other investigations, including a high-profile US Department of Justice case alleging a $250 million bribery scheme. Efforts to resolve that probe have reportedly stalled, leaving uncertainty over Adani’s global legal battles.
Supreme Court’s Stand
In January 2024, India’s Supreme Court supported SEBI’s closure of its probe into certain allegations, ruling that no further investigations were necessary. Gautam Adani hailed the verdict as a vindication of the group’s compliance with Indian laws.
Market and Political Implications
The Adani SEBI clearance may bolster investor sentiment and help the group resume its halted expansion plans. Adani Group plays a crucial role in India’s infrastructure and energy development, aligning closely with Prime Minister Narendra Modi’s economic agenda.
However, analysts warn that lingering legal challenges — particularly those outside India — could still weigh on investor confidence.
Source: Bloomberg
