SC Panel's Clean Chit for Adani Group in Hindenburg allegations: "Prima facie no violation"

Digital Desk: A Supreme Court-appointed team of experts investigating India's regulatory structure in connection with the Hindenburg claims has granted the Adani Group a clean chit and stated that there appears to have been no regulatory failure on the part of market regulator SEBI.

The experts' committee, which included domain specialists, also stated that the Adani Group did not engage in price manipulation and that the conglomerate had taken the required steps to reassure ordinary investors. The group's mitigating steps served to build confidence in the shares, and the stock is currently steady, according to the panel.

"At this stage, as per explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation," the panel stated in its report to the Supreme Court.

It also stated the necessity for an effective enforcement programme that is "coherent and consistent" with the legislative position taken by SEBI, or the Securities and Exchange Board of India.

Retired Supreme Court judge Justice AM Sapre, retired Bombay High Court judge Justice JP Devadhar, former State Bank of India Chairman OP Bhatt, former ICICI Bank chief KV Kamath, Infosys co-founder Nandan Nilekani, and securities and regulatory expert Somasekhar Sundaresan were among those on the Supreme Court-appointed group.

The Supreme Court-appointed committee, which just delivered its conclusions to the Supreme Court, stated that SEBI discovered some firms had taken a short position prior to the Hindenburg report and benefitted when the price plummeted as a result of the report.

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The committee discovered no evidence of repeated fake trading or wash trades between the same parties.

According to the committee, there was no failure of regulation connected to Minimum Public Shareholding and no violation of standards was seen.

The committee declared unequivocally that the regulator had failed to demonstrate that its suspicions could be turned into a solid case for prosecuting a violation accusation.

According to the committee, foreign portfolio investors in Adani Group equities comply with SEBI laws.

SEBI was requested to investigate charges of price manipulation in Adani stocks in the aftermath of the Hindenburg report. Several entities had taken short positions prior to the publication of the Hindenburg report, and because SEBI's inquiry into it is still ongoing, the committee has decided not to comment on the merits of the issue.

However, the Indian market was not excessively volatile during this time. The total market impact of Adani Group-related events was minimal, as its index weightage in the Sensex-30 was nil and about 2% in the Nifty 50.

Additionally, the SC earlier this week gave SEBI until August 14 to conduct its investigation into the Hindenburg claims.