New Delhi: The Supreme Court on Wednesday delivered its verdict in the Adani-Hindenburg case, dismissing the pleas for a special investigation team (SIT) to look into the allegations of fraud and stock manipulation against the Adani Group. The apex court upheld the authority of the Securities and Exchange Board of India (SEBI) to conduct the probe and directed it to complete the investigation in the pending two cases within three months.
The case stems from a report published by Hindenburg Research, a US-based short-seller firm, in January 2023, accusing the Adani Group of engaging in a “brazen stock manipulation and accounting fraud scheme over decades”. The report, which came days before the planned $2.5 billion share sale by Adani Enterprises, the group’s flagship company, triggered a sharp fall in the stock prices of the Adani companies and raised questions about their financial health and governance.
Several petitions were filed in the Supreme Court, seeking an independent probe by an SIT into the allegations, alleging that SEBI was not conducting a fair and impartial investigation. The petitioners also claimed that there was a conflict of interest among the members of the expert committee appointed by SEBI to assist in the probe.
However, the Supreme Court rejected these arguments and said that there was no reason to doubt the competence and integrity of SEBI, which is the statutory regulator of the securities market. The court said that the Hindenburg report was not conclusive proof of any wrongdoing by the Adani Group and that SEBI had the power and duty to examine the veracity of the allegations and take appropriate action.
The court also said that the expert committee, comprising eminent persons from various fields, had given valuable suggestions to SEBI and the government to improve the regulatory framework and protect the interests of Indian investors. The court asked SEBI and the government to act on these recommendations and strengthen the existing system.
The court also noted that SEBI had already completed its investigation in 22 out of the 24 cases related to the Adani Group and had initiated proceedings against the entities involved. The court ordered SEBI to expedite the investigation in the remaining two cases and submit a report within three months.
The verdict came as a big relief for the Adani Group, which had denied the allegations and termed the Hindenburg report as a “calculated attack on India”. The group had also said that the report was an attempt to sabotage its $2.5 billion share sale, which was aimed at raising funds for its ambitious expansion plans in various sectors.