SEBI clean chit: Gautam Adani writes letter to shareholders on Hindenburg; calls report a direct challenge to the audacity of Indian enterprises

Gautam Adani, the Adani group’s founder and chairman, has written about the Hindenburg report and recent SEBI clean chit. In a letter to shareholders, Gautam Adani said the Hindenburg report, aimed at weakening the group, has actually strengthened it.Following his demand for a 'national apology' from the US-short seller on social media, he issued a letter to shareholders emphasising the group's commitment to transparency and governance."What was meant to weaken us has instead strengthened the very core of our foundations," he wrote in his letter.He added that January 24, 2023 will be remembered as a morning when India's markets awoke to headlines that reverberated far beyond Dalal Street.The letter indicated that the Hindenburg report questioned Indian businesses' boldness to envision global aspirations.“Hindenburg’s report was not merely a critique of your Adani Group. It was a direct challenge to the audacity of Indian enterprises to dream on a global scale,” he said.“What was intended to hurt us has instead become a defining inflection point by fortifying our foundations, sharpening our ambition and reaffirming our responsibility to build with scale, speed and resilience for India’s future,” he added.

In January 2023, Hindenburg Research, a US-based short seller, published a report accusing Gautam Adani, Adani Power, Adani Enterprises and Adicorp Enterprises Pvt Ltd. of engaging in stock manipulation and accounting irregularities.Following the report's release, shares of the group's listed companies experienced a significant decline, with several stocks reaching their lower price limits.His recent statement on X platform noted, "We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report.

Those who spread false narratives owe the nation an apology."

SEBI clean chit for Adani on Hindenburg

The Securities and Exchange Board of India (SEBI) commenced an investigation covering FY13 to FY21. On January 15, 2024, SEBI issued notices to individuals and organisations mentioned in the allegations.The investigation focused on examining possible breaches of public shareholding requirements, manipulation of stock prices through foreign portfolio investments, and suspected insider trading activities within Adani Group companies.The investigation encompassed 13 cases regarding related party transactions, with two cases having been previously resolved in SEBI's 2013 decision.SEBI's concluding assessment determined that the transactions between companies were not fraudulent, as no funds were misappropriated or redirected. The funds were returned with interest before investigations began, and these dealings were not categorised as related party transactions."There is no violation of listing agreement or Sebi (LODR) regulations as the impugned transactions do not qualify as 'related-party transactions'," Sebi whole-time member Kamlesh Varshney said in his orders. "Plain reading of Listing Agreement and Sebi (LODR) Regulations reveals that transactions between a listed company with unrelated party is not covered within the definition of related party transactions as it existed during the time when impugned transactions took place," SEBI said in its report.