Big Win For Adani Group As Supreme Court Rules In Its Favour Regarding Hindenburg Allegations

2024 has indeed begun as a happy new year for Adani Group. Nearly a year after billionaire Gautam Adani's conglomerate was rattled by Hindenburg Research¡¯s report, the Adani group has scored a big win today after the Supreme Court announced a ruling in its favour.

Supreme Court Rules In Favour Of Adani Group

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The Supreme Court holds that there is no ground to transfer the investigation from SEBI to SIT. As per LiveLaw, the CJI said, "The reliance on the OCCPR report is rejected, and reliance on a third-party organisation report without any verification cannot be relied upon as a proof. The Govt of India and the Sebi to look into if there is any infraction of law by the Hindenburg report on short selling and if so, take action in accordance with law. The Govt of India and SEBI shall take into consideration the recommendations of the committee to strengthen interest of the Indian investors."

The CJI added, "Reliance on newspaper reports and third-party organisations to question the statutory regulator does not inspire confidence. They can be treated as inputs but not conclusive evidence to doubt the SEBI probe. Before concluding, public interest jurisprudence was developed to provide access to ordinary citizens...petitions which lack adequate research and rely on unsubstantiated reports cannot be accepted"

Also Read: Meet Nathan Anderson, The Man Behind Hindenburg Report

Adani Group Shares Surge Up to 14%

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Before the verdict at 10:30 am today, Adani shares had already begun trading up to 14% in green this morning in anticipation of a favourable verdict by the Supreme Court on petitions seeking a probe into the allegations of stock price manipulation against the Gautam Adani-led Adani group by Hindenburg research.

As expected, shares of the group's flagship firm, Adani Enterprises, have already jumped over 6 percent to Rs 3,122.40 on the National Stock Exchange (NSE) in the morning trade. As per the Moneycontrol report, Adani Total Gas surged over 10 percent to Rs 1,100.95, and Adani Energy Solutions surged 14 percent. Adani Power, Adani Green Energy, Adani Ports, and Adani Wilmar rose by 7 percent.

Also Read: Hindenburg Trolled For Failing To Detect SVB Crisis

Looking Back At The Adani-Hindenburg Timeline

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January 24:

In a report on the Adani Group companies, Hindenburg Research claims to have "engaged in brazen stock manipulation and accounting fraud."

This occurs only a few days before the flagship Adani Enterprises company of the Adani group will make a Rs 20,000 crore follow-on public offer (FPO). The conglomerate has responded by calling the report "malicious" and "baseless," claiming it was created with the malicious intent to sabotage its share sale.

January 26:

According to Adani Group, legal action against Hindenburg Research is being considered. The short seller maintains its position and declares that it will request disclosures from the business in legal proceedings.

January 27:

The FPO of Adani Enterprises gets opened for subscription.

January 31:

The FPO subscription deadline has passed. The issue attracts bids worth over Rs 16,000 crore and receives a 1.12-times subscription. More than sixty percent of these bids are from wealthy individuals (HNIs). There are 3.3 subscriptions to the HNI quota. However, no bid from domestic financial institutions or mutual funds (MFs) was received for the three-day FPO.

February 1:

Adani Enterprises renounces its FPO of Rs 20,000 crore. According to a press release, "Given the unprecedented situation and the current market volatility, the company aims to protect the interests of its investing community by returning the FPO proceeds and withdrawing the completed transaction."

Billionaire Adani says, "The interest of the investors is paramount, and hence, to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO."

February 2:

There is a commotion in Parliament as the opposition parties demand the creation of a Joint Parliamentary Committee (JPC) to look into the purported irregularities of the Adani group of businesses.

February 10:

According to the Supreme Court, a strong system is needed to safeguard investor interests. It requests opinions on arguments claiming investor exploitation and "artificial crashing" of the Adani Group's stock value from both the Centre and Sebi. It also aims to form a committee of experts.

February 13:

The proposal from the SC to form an expert panel to examine bolstering the regulatory framework for the Indian stock market was approved by the Center.

February 14:

Sebi informs the Supreme Court that it is looking into the claims made in the Hindeburg report against the Adani group. Additionally, it states that it is keeping an eye on market activity both before and after the report's release.

March 2:

The Supreme Court mandates the formation of a committee to look into the Adani Group and recommend ways to improve the legal framework that safeguards Indian investors. AM Sapre, a former SC judge, was named the committee's head. Other members of it include Somasekharan Sundaresan, KV Kamath, and Nandan Nilakeni. Sebi is also requested to look into the collapse of the Adani Group's stock.

April 29:

Sebi moves SC, seeking a six-month extension to complete its probe into the allegations of stock price manipulation.

May 17:

SC grants SEBI time until August 14 to submit its report on the Adani-Hindenburg case.

May 19:

According to the Supreme Court-appointed panel, identifying the regulatory shortcoming in the Adani-Hindenburg scheme will prove to be challenging. The panel claims that it was unable to identify any repeated patterns of fictitious trading between the same parties.

July 11:

Sebi is questioned by the SC bench, led by CJI DY Chandrachud, regarding the status of the investigation. He states that the investigation must be finished by August 14.

August 14:

Sebi wants to extend the investigation by 15 days. It claims to have looked into and looked into 24 case-related issues.

"Out of the said 24 investigations/examinations, 17 are final and complete and approved by the competent authority in accordance with Sebi's extant practices and procedures," the regulator says.

August 25:

Sebi informs the Supreme Court that it has investigated all but two of the charges made against the Adani group and is currently obtaining information from five tax havens regarding the true identities of the foreign investors who made the conglomerate's investments.

August 31:

Another report is released by the Organised Crime and Corruption Reporting Project (OCCRP). claims that "hundreds of millions" of dollars were invested through "opaque" investment funds based in Mauritius and run by partners in the promoter family in publicly traded group stocks of the Adani group companies. The corporation dismisses the accusations as "recycled allegations" and rejects them.

November 24:

The bench, consisting of Chief Justice of India DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, had reserved the judgement for November 24, 2023, regarding the PILs seeking a court-monitored investigation into the allegations outlined in the Hindenburg Research report concerning stock price manipulations by the Adani group of companies, according to LiveLaw. During the proceedings, the bench orally stated that there was no evidence to doubt the investigation conducted by the Securities and Exchange Board of India. Additionally, the bench expressed hesitancy in accepting arguments challenging the impartiality of the members of the expert committee formed by the Court to examine the issue.

January 3:

The Supreme Court rules in favour of the Adani group on petitions seeking a probe into the allegations of stock price manipulation against Gautam Adani-led congolomerate by Hindenburg research. Adani Group's shares surged amid the verdict.

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