The Supreme Court, on January 3, 2024 has refused SIT (Special Investigation Team) probe into Adani-Hindenburg probe and has endorsed the SEBI (Securities and Exchange Board of India) probe instead, giving the reason that the facts of the case do not warrant the transfer of case to SIT or other agency.
A bench comprising Chief Justice DY Chandrachud, Justices Pardiwala and Manoj Misra pronounced the verdict, directing market regulator SEBI to complete its probe within three months.
From Where Did It All Start?
On January 24, 2023, a US-based forensic financial research firm, Hindenburg Research which has a track-record of finding corporate wrongdoings and placing bets against the companies, accused billionaire Gautam Adani-led conglomerate of stock manipulation and accounting fraud schemes over decades.
The report released by the firm, with the title, ‘How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History,’ alleged improper use of tax havens and flagged concerts about debt levels.
The firm also said that Adani’s listed companies experienced several changes in their Chief Financial Officers (CFOs) and that the group employed lesser known auditors. They specifically pointed out that Adani Enterprises had five CFOs within eight years, highlighting that this is a significant indicator of possible accounting concerns.
After the release of this report, the stocks of all nine companies of the Adani Group plunged with market losses of $100 billion. On January 31, 2023, foreign investors and Corporates bailed out the Rs 20,000 crore FPO of Adani Enterprises amid the crash in Adani Group shares.
Adani Enterprises Ltd. (AEL) planned to call off a $2.5 billion share sale and said that it would refund the money to the investors. From being the 3rd richest man in the world, Adani slipped to No.15.
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What Was Adani’s Response?
The Adani Group issued a statement of 413 pages, saying “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”
“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors.”
Hindenburg replied to Adani by saying, “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation that we raised.”
What Turn Did The Story Take Then?
On February 14, 2023, the SEBI wrote to the Supreme Court, saying it’s “already inquiring into both, the allegations made in the Hindenburg report as well as the market activity immediately preceding and post the publication of the report, to identify violations of SEBI Regulations.”
On March 2, the Supreme Court consolidated multiple PILs related to the Adani-Hindenburg saga into a single case. The apex court also formed a six-member committee to investigate and examine if there was any regulatory failure in the matter.
The SEBI was mandated to probe the allegations. The report of the expert committee, which later came out, stated that there was no evidence of a “regulatory failure” on the part of the markets regulator Securities and Exchange Board of India.
The SC had reserved its verdict on a batch of pleas concerning this row. Today, January 3, 2024 the Supreme Court refused to transfer the probe into the allegations of stock price manipulation by the Indian corporate giant to a special investigation team and directed market regulator SEBI to complete its probe into two pending cases within three months.
Image Credits: Google Images
Feature image designed by Saudamini Seth
Sources: Hindustan Times, The Indian Express, The Hindu
Find the blogger: Unusha Ahmad
This post is tagged under: Gautam Adani, Hindenburg Research, Adani Enterprises, Supreme Court, SIT, SEBI, CJI, DY Chandrachud, Justice Pardiwala, Justice Manoj Misra, corporate, stocks, stock prices, CFO, Adani Group, FPO, AEL, Adani Hindenburg row, investors
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