The Securities and Exchange Board of India (SEBI) on Thursday cleared the Adani Group of allegations raised by US-based short-seller Hindenburg Research, concluding there was no breach of regulatory norms by the conglomerate’s companies.
In a detailed order, SEBI whole-time member Kamlesh Chandra Varshneya wrote that the allegations in the show-cause notice were not substantiated. As a result, no liability arises for the noticees, and there is no need to consider any penalty.
SEBI also closed the current proceedings against Adani Ports, Adani Power, Gautam Adani, and Rajesh Adani.
Background: In 2023, Hindenburg Research alleged stock manipulation, misuse of offshore tax havens, and inflated valuations at the Adani Group. Among its claims was that the group received funding via Milestone Tradelinks, Rehvar Infrastructure, and Adicorp Enterprises, questioning the source of funds routed through these entities and suggesting they were conduits to mask related-party transactions.
The Adani Group, in its response, said the dealings were legitimate commercial transactions, fully repaid with interest, and compliant with the applicable law at the time. It maintained that Milestone and Rehvar were not “related parties” and that there was no diversion of funds or investor harm.
After reviewing submissions, SEBI held that all loans and repayments during the probe period were completed with interest and did not amount to violations. The regulator further noted that amendments expanding the definition of related-party transactions took effect only from April 2023 and could not be applied retrospectively. On that basis, SEBI dismissed allegations of concealment, misrepresentation, or breaches of disclosure requirements.
Since the transactions did not meet the definition of related-party transactions, SEBI said the charge that Noticee Nos. 7 and 8 aided, abetted, or facilitated any circumvention of the law was unfounded.
Reacting to the order, Gautam Adani said SEBI’s ruling reaffirmed the group’s consistent position that Hindenburg’s claims were baseless. He expressed sympathy for investors who suffered losses due to what he called a fraudulent and motivated report, and said those who propagated false narratives owe the nation an apology.