Sebi Seeks 15 More Days To Submit Final Report On Adani Group Over Hindenburg Allegations

Investors dumped Adani Group-backed listed shares on Monday as market regulator Sebi has sought 15 days more to complete its report on Adani-Hindenburg row. While requesting, Sebi informed the Supreme Court that substantial progress had been made in the probe. Adani shares have plunged between 2% to 5% with flagship Adani Enterprises emerging among the top losers on exchanges with a downfall of at least 5.4% on BSE.

According to LiveLaw report, Sebi applied to the Supreme Court seeking 15 more days to complete the investigation into the allegations made by Hindenburg against the Gautam Adani-backed group.

Earlier, the apex court set the deadline of August 14, which is expiring today.

The report revealed that in its application, Sebi said, that "it has progressed substantially".

In one matter, Sebi informed the court that an interim report had been prepared based on the materials available. The regulator said that it has information from agencies and regulators in foreign jurisdictions, etc. over it.

Sebi stated that once such information is received, it will evaluate the same to determine further course of action, if any, in the said matter.

Further, the regulator informed that from the remaining 6 matters, in 4, findings have been crystalized and the reports are waiting for the approval of the competent authorities.

Finally, in the other two matters, Sebi said the investigation is at an advanced stage in one matter, while an interim report is under preparation in the other.

At the time of writing, Adani Enterprises stock dipped by nearly 3%, while Adani Ports fell by 2%, Adani Power dropped by 1.6%, Adani Transmission shed 2.3%, Adani Total Gas dived 1.7%, Adani Green Energy slipped 1.8%, and Adani Wilmar plunged 1.9%. The Group's media stock NDTV tumbled by 1.6%, and its two cement stocks namely ACC and Ambuja Cements plummeted by 1.6% and 3.5% respectively.

Gautam Adani's energy-to-port empire came under the radar of the Supreme Court after a US-based short seller Hindenburg Research dropped a mind-boggling report accusing the conglomerate of various allegations. The short seller's report which came in late January led to billions of dollars of the market rout, volatile markets, protests from oppositions and Sebi investigations which are still underway.

Four public interest petitions were filed at the Supreme Court against Adani Group, demanding directions related to allegations made by Hindenburg against the billions of dollars worth conglomerate.

In March, the court had asked Sebi to look into the matter and find out if any breaches and possible price manipulations were done by the group that violated the existing law. Sebi was supposed to submit a report in the Adani-Hindeburg row back in April, however, it sought an extension of six months which ended on August 14.

In its bombshell report dated January 24, 2023, Hindenburg accused the Adani Group of engaging in a brazen stock manipulation and accounting fraud scheme over the course of decades.

Hindenburg's report had claimed that Gautam Adani, Founder and Chairman of the Adani Group, has amassed a net worth of roughly $120 billion, adding over $100 billion in the past 3 years largely through stock price appreciation in the group's 7 key listed companies, which have spiked an average of 819% in that period. This was

Among many findings, Hindenburg reported that publicly listed companies in India are subject to rules that require all promoter holdings (known as insider holdings in the U.S.) to be disclosed. Rules also require that listed companies have at least 25% of the float held by non-promoters in order to mitigate manipulation and insider trading. 4 of Adani's listed companies are on the brink of the delisting threshold due to high promoter ownership.

It added, "Our research indicates that offshore shells and funds tied to the Adani Group comprise many of the largest "public" (i.e., non-promoter), holders of Adani stock, an issue that would subject the Adani companies to delisting, were Indian securities regulator SEBI's rules enforced."

In May, the Expert Committee constituted by the Supreme Court stated that they could not arrive at a finding of "regulatory failure" of SEBI in dealing with the alleged contravention of securities law by the Adani Group or any other companies, as per the LiveLaw report.