India News : New Delhi: The Securities and Exchange Board (SEBI) on Thursday gave a clean chit to Adani Group in the matter related to the allegations made by US Short seller Hindenburg, concluding that there is no violation of listing agreement or SEBI Listing Obligations and Disclosure Requirements (LODR) and the impugned transactions do not qualify as “related party transactions”.
“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, though included specifically after the 2021 amendment,” SEBI said in a statement.
The market regulator further highlighted that there is no violation of Section 12A of the SEBI Act and SEBI-Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market (PFUTP) Regulations, as alleged.
It further concluded that no fraud, misrepresentation, or siphoning of funds was proven and all funds were returned with interest. Thus, all allegations in Show cause Notice not established.
SEBI also said that no liability or penalties were imposed on Adani Group entities or individuals and the proceedings were disposed of without directions.
In January 2023, Hindenburg published a report accusing the Adani Group of financial irregularities, leading to a significant drop in the company’s stock price. It had alleged that Adicorp Enterprises Pvt Ltd was used as a vehicle to route funds from various Adani group companies to publicly listed Adani Power.
According to the report, four Adani group firms lent Adicorp a total of Rs 620 crore in 2020, and Adicorp subsequently loaned Rs 610 crore to Adani Power on an unsecured basis. The report had claimed these transactions were not disclosed in the financial statements of the lending companies, several of which are listed entities.
Sebi stated that a detailed investigation was conducted to assess whether the transactions violated the Sebi Act or involved material misrepresentation in the financial statements. It also highlighted that the Supreme Court had rejected the plea of the petitioner and held that the procedure followed in arriving at the current shape of regulations is not tainted with any illegality. The Supreme Court also held that no valid grounds have been raised to direct SEBI to revoke its amendments to the SEBI (LODR) Regulations.
Adani Group has repeatedly denied all the accusations in the Hindenburg Research report. Group Chairman Gautam Adani had also said “they were faced with baseless accusations made by a foreign short seller that questioned our decades of hard work.”
