In a significant turn of events, the Supreme Court of India has reserved its judgment in the much-talked-about Adani-Hindenburg case, signalling a potential vindication for the Adani Group. Chief Justice of India, DY Chandrachud, has questioned the credibility of the Hindenburg Research report, which had accused the conglomerate of financial misconduct. This development comes amidst an ongoing investigation by the Securities and Exchange Board of India (SEBI), which has yet to file any charges against the Adani Group.
SEBI's Progress Report in Court
During the hearing on November 24, Solicitor General Tushar Mehta, representing SEBI, informed the apex court about the current status of their investigation into Gautam Adani's empire. Out of the 24 cases identified by SEBI related to the conglomerate, 22 have been investigated. The final resolution of the remaining cases is pending responses from foreign regulators, with no definitive timeline established.
Chief Justice Chandrachud inquired about the implementation of potential regulatory changes and the authorities responsible for such actions. The Solicitor General clarified that SEBI's role is limited, as the Central government holds the rule-making power, necessitating a joint effort for implementing any new measures.
Controversies around the SC Panel Report
The court addressed objections to the report of the SC-appointed expert committee, which includes retired judge AM Sapre and Nandan Nilekani. The committee did not find any disclosure rule breaches. The court warned petitioner Prashant Bhushan against casting doubts on the committee's integrity. It was revealed that Bhushan had shared documents with the George Soros-funded OCCRP. The Chief Justice emphasized the need for a cautious approach towards the Hindenburg report.
SEBI's Upcoming Actions on Short Selling & Hindenburg Allegations
SEBI is gearing up to release its findings and potential penalties related to short selling in Indian markets. These findings are crucial in addressing Hindenburg's allegations, which involve inflated share prices and purported close ties between Adani and Prime Minister Narendra Modi. The Chief Justice's comments highlight the importance of thoroughly examining the validity of the Hindenburg report.
The controversy traces back to Hindenburg's accusation in January against the Ahmedabad-based conglomerate of stock manipulation and accounting fraud. The Adani group has vehemently denied these claims, labelling the report as an attack on India. Following numerous PILs, the Supreme Court in March 2023 formed an expert panel to investigate and suggest improvements to the regulatory framework. SEBI was initially given until May, with an extension to August, to complete its probe.
These allegations resulted in a substantial $125 billion drop in the market value of Adani's stocks during January and February.
Market Response to Recent Developments
As of 10 AM on November 28, there was a noticeable upsurge in Adani Group shares. Leading the way in the Nifty index, Adani Enterprises saw a substantial increase, climbing over 6%. Other companies in the group also experienced significant gains: Adani Total Gas soared by 15%, Adani Energy Solutions by 12%, Adani Power and Adani Green Energy each by 7%, Adani Wilmar and NDTV both by 5%, Adani Ports by 3.5%, while Ambuja Cements and ACC rose by 3% and 2.7% respectively.