Adani Group shares surge 10% after SEBI's dismisses Hindenburg charges
What's the story
Shares of Adani Group companies, including Adani Total Gas, Adani Enterprises, and Adani Power, jumped up to 10% in Friday's trading session. The surge comes after the Securities and Exchange Board of India (SEBI) cleared billionaire Gautam Adani and his conglomerate of stock manipulation charges by US-based short-seller Hindenburg Research. The regulator found no evidence that the group used related parties to channel funds into its listed companies.
Investigation findings
SEBI dismisses allegations of market manipulation
In two detailed orders, SEBI dismissed allegations of market manipulation and violations of public shareholding norms. The accusations stemmed from a January 2023 report by Hindenburg Research. The report alleged that the Adani Group used three companies—Adicorp Enterprises Pvt Ltd, Milestone Tradelinks Pvt Ltd, and Rehvar Infrastructure Pvt Ltd—as conduits to transfer funds from various group firms to publicly listed entities Adani Power and Adani Enterprises Ltd.
Clarification
No breach of disclosure requirements: SEBI
SEBI board member Kamlesh C Varshney clarified in the orders that there was no breach of disclosure requirements. He said the transactions between these three firms and other group companies did not qualify as related party dealings under the rules at that time. The regulator also found no evidence of violations concerning substantial acquisition of securities or control that might mislead investors.
Market impact
Adani Group's response to Hindenburg report
SEBI's clean chit comes after months of scrutiny and market speculation triggered by Hindenburg's report. The allegations had triggered a sharp sell-off in Adani Group stocks, wiping out more than $100 billion in market value at its lowest point. The Adani Group has consistently denied all allegations contained in the Hindenburg report, with its shares having largely recovered since then.