On Wednesday, the Supreme Court will rule on a number of petitions requesting a probe into claims of stock manipulation and accounting fraud made against Adani group firms in a January 2023 research report by US short-seller Hindenburg Research.
Justices JB Pardiwala and Manoj Misra, along with Chief Justice Dhananjaya Y. Chandrachud, will sit on a bench to decide what actions the Securities and Exchange Board of India (Sebi) should take to safeguard investors by reining in excessive market volatility and tightening relevant regulations.
In January 2023, the Hindenburg Research report accused the Adani Group of decades of blatant stock manipulation and accounting fraud.
Hindenburg accused Adani Group
The news caused a sharp decline in the Adani Group firms' stock value. In a few days, the Group lost around $140 billion.
According to a US short-seller report, Gautam Adani, the chairman of Adani Group, gained around $120 billion in net worth during the previous three years, primarily from increases in stock prices.
In its preliminary report released in May 2023, an expert committee tasked by the Supreme Court to investigate Hindenburg Research's claims said that it had observed "no evident pattern of manipulation" in Adani's enterprises and that there had been no regulatory breach. The SEBI notified the Supreme Court in November that it had concluded its investigation into 22 of 24 charges of short selling against Adani Group and that no more time was required.
Gautam Adani attacked the short seller in the AGM in response to Hindenburg Research's accusations, stating: "The report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015. They were all settled by the appropriate authorities at that time. This report was a deliberate and malicious attempt aimed at damaging our reputation and generating profits through a short-term drive-down of our stock prices.”