Hindenburg case: Sebi gives clean chit to Adani Group; Gautam Adani says 'claims were baseless'

The Securities and Exchange Board of India (Sebi) on Thursday gave a clean chit to Adani Group chairperson Gautam Adani in connection with the allegations made by US-based short-selling firm Hindenburg Research, saying the charges that have been made against the Noticees have not been 'established'.

In its two separate orders dated September 18, the capital market regulator further stated that no penalty would be imposed on the Adani Group in connection with the Hindenburg allegations. 

"The allegations made against Noticees in the SCN are not established," the Sebi said. "Considering the above, the question of devolvement of any liability on Noticees does not arise and hence the question of determination of quantum of penalty also does not require any deliberation."

'Loans repaid with interest': Sebi

The Sebi also noted that the loans were repaid with interest, no funds were siphoned off, and hence there was no fraud or unfair trade practice. In its investigation, Sebi said it found that Adani Ports had transferred funds to Adicorp Enterprises, which provided the funds as loans to Adani Power. However, Adani Power repaid the loans to Adicorp Enterprises, which later repaid it to Adani Ports with interest. 

Similarly, in another case that it was investigating, Adani Ports transferred funds to Milestone Tradelinks as loan, which were later transferred to Adani Power. But the Adani Power repaid the loan to Milestone Tradelinks, which later repaid it to Adani Ports with interests, the Sebi noted.

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"Thus, loans were given and repaid with interest in various tranches during the investigation period," the Sebi stated.

Gautam Adani welcomes Sebi verdict

Adani Group chairperson Gautam Adani has welcomed the Sebi verdict, stressing that the group is committed to India's institutions and its people. He said the group has always maintained "transparency and integrity", while calling the allegations levelled by Hindenburg 'baseless'.

"We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report. Those who spread false narratives owe the nation an apology," he posted on X.

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What were the Hindenburg allegations?

In 2021, the Hindenburg, a US firm, had alleged that the Adani Group used three companies -- Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure -- as conduits to route money between Adani group firms. The claim was that this helped Adani avoid rules on related party transactions, possibly misleading investors.