Sebi gives clean chit to Adani on Hindenburg allegations

Mumbai: The Securities and Exchange Board of India (Sebi) on Thursday exonerated Gautam Adani, his brother Rajesh Adani and some Adani Group companies in a case related to allegations levelled against them by Hindenburg Research in January 2023.

"After an exhaustive investigation, Sebi has reaffirmed what we have always maintained, that the Hindenburg claims were baseless," Gautam Adani posted on X. "Transparency and integrity have always defined the Adani Group. We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report."

In two separate final orders, Sebi said the accusations couldn't be established. These had been that the promoters used Adicorp Enterprises Pvt Ltd, Milestone Tradelinks Pvt Ltd and Rehvar Infrastructure Pvt Ltd as conduits to route funds from various group firms to listed Adani Power and Adani Enterprises.


The US short-seller had in January 2023 published a report accusing the Adani Group of stock manipulation and accounting fraud scheme, triggering a crash in the shares of listed group companies.

No Fraudulent Transactions
Sebi had initiated its investigation into these allegations for the period from FY13 to FY21, issuing show cause notices to the persons and companies named in the report on January 15, 2024.

Its probe revealed that Adani Ports & Special Economic Zone (APSEZ) transferred funds as loans to Adicorp Enterprises, which in turn transferred funds as loans to Adani Power. Subsequently, Adani Power repaid the loans to Adicorp along with interest. Adicorp in turn repaid the loans to APSEZ with interest.

In another case, APSEZ transferred funds as loans to Milestone Tradelinks and Rehvar Infrastructure, which in turn transferred funds to Adani Power and Adani Enterprises as loans.

Subsequently, Adani Power and Adani Enterprises repaid the amounts to Milestone Tradelinks and Rehvar Infrastructure, along with interest. They in turn repaid the amounts to APSEZ with interest.

In the case of Adicorp Enterprises, 67% of its transactions were with the Adani Group and loan agreements were entered into the same day without allegedly looking at creditworthiness. Besides, Aadarsh Shah, one of its directors, knew the Adani family for more than 30 years.

The regulator in its 2024 notice had said Gautam Adani and his brother Rajesh Adani, being directors of Adani Ports & Special Economic Zone and Adani Power, approved financial transactions and allegedly engaged in acts of devising a scheme to conceal related-party transactions. They were also accused of false certification of the financials of these two companies for six years from FY13 to FY21.

However, in its final orders, Sebi said the transactions cannot be classified as fraudulent as there was no siphoning of money or diversion of funds. All the money had been returned with interest before the start of the investigation and these transactions have not been held to be related party transactions.

"There is no violation of listing agreement or Sebi (LODR) regulations as the impugned transactions do not qualify as 'related-party transactions'," Sebi whole-time member Kamlesh Varshney said in his orders. "Plain reading of Listing Agreement and Sebi (LODR) Regulations reveals that transactions between a listed company with unrelated party is not covered within the definition of related party transactions as it existed during the time when impugned transactions took place."

LODR or Listing Obligations and Disclosure Requirements govern listed companies in India.