The Supreme Court-appointed experts committee stated in its report that it cannot presently infer that there was a regulatory failure on the part of SEBI in the Adani-Hindenburg controversy. The Adani Group did not engage in price manipulation, according to a Supreme Court panel of domain experts, adding that the Adani Group took the necessary procedures to reassure retail investors.
The group’s mitigating steps served to build confidence in the shares, and the stock is currently steady, according to the panel.
The committee found no evidence of repeated artificial trading or wash trades between the same parties. Moreover, no clear pattern of abusive trading was noticed.
According to the committee, “the Securities and Exchange Board of India (SEBI) has identified 13 specific transactions in which it is investigating the underlying transactions irrespective of whether they are legally considered ‘related party transactions’ in terms of determining whether they were fraudulent in nature.
The committee further stated that there was no regulatory failure relating to Minimum Public Shareholding and no violation of compliances.
The committee headed by former Supreme Court judge AM Sapre stated unequivocally that the regulator had failed to demonstrate that its suspicions could be turned into a solid case for prosecuting a violation accusation.
According to the committee, foreign portfolio investors in Adani Group equities are in compliance with SEBI regulations.
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.
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 Supreme Court, rejecting a request for a six-month extension, gave SEBI until August 14 to conclude its investigation into the accusations of stock price manipulation in the matter.
Congress and its attack against Adani using the Hindenburg report
The Congress party had attacked the Indian conglomerate Adani Group after US-based activist investor group Hindenburg Research published a 32,000-word report against it. The investment research firm claimed that Adani Group was involved in a “brazen stock manipulation and accounting fraud scheme over the course of decades.”
Hindenburg Research claimed that it has conducted an investigation on the company for the last two years and that it has documents to prove its claims. Hindenburg Research Report accused Adani family members of creating and managing “a vast labyrinth of offshore shell entities” in tax havens like Mauritius, Cyprus, and the UAE. The report claimed that some of these entities were used for market manipulation.
It said Gautam Adani has a net worth of approximately $120 billion, mainly due to an 819% average stock price growth in the group’s seven most significant publicly traded companies over the last three years.
While the Adani group had rubbished the allegations, Congress had demanded a JPC into the matter and attacked Prime Minister Narendra Modi, saying that Modi had facilitated the so-called corruption by Adani.
With the Supreme Court giving a clean chit to the Adani conglomerate now, Rahul Gandhi and Congress’ trope against PM Modi also falls flat, just like their lies in the Rafale saga were busted by the SC clean chit.
