SC panel says no evidence of Adani stock price manipulation

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A panel set up by the Supreme Court in the Adani Group and Hindenburg cases has submitted its report. In this report, the panel stated that it did not find anything to suggest that the market regulator SEBI has made any regulatory errors. However, there are questions regarding the ownership rights of 13 foreign entities associated with the Adani group.

The committee was tasked with investigating whether there was any manipulation in the shares of the Adani Group. The committee stated that it is difficult for them to conclude if any wrongdoing has occurred and recommended that the market regulator SEBI investigate the matter. The court stated that SEBI will need to conduct the investigation within a specified time frame. The committee highlighted an important point that after the Hindenburg report, there has been an increase in the participation of small investors in the shares of the Adani Group. However, after the Supreme Court’s report was released, a surge was observed in 9 out of 10 shares of the Adani Group.

The panel has stated in the Adani and Hindenburg cases related to share price manipulation, it cannot be said that there has been any mistake from SEBI’s side. The committee also stated that nothing can be said regarding any regulatory failure in terms of minimum public shareholding or related party transactions.

However, according to the report, SEBI has long suspected that some of the public shareholders coming through the 13 foreign entities may actually be fronts for the company’s promoters. Despite investigations by various agencies such as CBDT and ED, SEBI has not been able to ascertain the actual owners of these 13 entities. The panel has emphasised that all investigations should be completed within a specified time frame.

The committee has received evidence that American short sellers built short positions in Adani Group’s shares before the release of the Hindenburg Group’s report. In January of this year, Hindenburg Research, an American short seller, made several serious allegations against the Adani Group in their report. The allegations included claims that the Adani Group made investments through tax havens and engaged in share price manipulation. The Adani Group had dismissed all the allegations as baseless. The chairman of the Supreme Court-appointed committee is Justice A.M. Sapre, a retired judge of the Supreme Court.