Adani Power, Adani Enterprises, Adani Ports shares in focus as SEBI clears Hindenburg case

Adani stocks such as Adani Power, Adani Enterprises, Adani Ports & SEZ are in focus on Friday after SEBI concluded that Hindenburg Research's allegations of fund routing through Adicorp, Milestone, and Rehvar to manipulate Adani’s listed companies did not hold. The regulator noted that while related-party transactions existed, they were disclosed and accounted for under the rules.

Nate Anderson, founder of US short-seller Hindenburg Research, disbanded his team in January this year. His January 2023 report on the Adani Group had erased $150 billion in market value from the conglomerate’s listed firms.

SEBI said there is no violation of Listing Agreement or SEBI (LODR) Regulations as the impugned transactions do not qualify as “related party transactions”. Besides, it said there is no violation of Section 12A of the SEBI Act and SEBI (PFUTP) Regulations as alleged in the SCN. 

"Once, it is held that there is no violation of above two main issues, (referred at paras 6.1 and 6.2 above) it logically leads to conclusion that there is no violation of all other related violations alleged against the Noticees, which relates to non-disclosure/approval of the related party transaction," SEBI said. 

It was alleged that, Adani Ports & Special Economic Zone Ltd, Adani Power Ltd, and Adani Enterprises Ltd structured the transactions to conceal the actual related party transactions by routing funds through Adicorp Enterprises, Milestone Tradelinks and Rehvar Infrastructure, thereby circumventing the related party provisions under the then Listing agreement and/or SEBI (LODR) Regulations.

SEBI’s investigation closed one of the most debated chapters of the Hindenburg-Adani controversy, giving the conglomerate a measure of relief after nearly three years of scrutiny.

The US-based short-seller had released a report alleging that three little-known firms—Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure—were being used as conduits by the Adani Group. According to the report, money was allegedly routed through these entities to fund listed companies such as Adani Power and Adani Enterprises.

SEBI began investigating the matter and traced the trail of transactions. The probe revealed that Adani Ports and Special Economic Zone had indeed advanced loans to Adicorp Enterprises. However, the regulator found no evidence to support the claim that these funds were round-tripped or diverted improperly into the Group’s listed entities.