Hindenburg Case: Supreme Court panel gives clean chit to Adani Group
New Delhi, May 19: In a major relief for Adani Group, a Supreme Court-appointed expert committee has given a clean chit to the conglomerate.
The apex court had appointed the panel to investigate allegations around the company made by US short-seller Hindenburg Research. The panel has found that it was not possible to conclude if there has been regulatory failure on stock price manipulation allegations.
Notably, the Hindenburg report alleged fraud, stock market manipulation and improper use of offshore entities by Adani Group.
According to the expert committee's findings, the Indian stock market as a whole was not overly volatile until January 24, when Hindenburg released its damning report.
The committee, which recently submitted its findings to the Supreme Court, stated that SEBI found some firms had taken a short position prior to the Hindenburg report and gained when the price plummeted as a result of the report.
The committee also found no evidence of repeated artificial trading or wash trades between the same parties.
According to the committee, no clear pattern of abusive trading was discovered.
According to the committee, there was no regulatory failure relating to Minimum Public Shareholding and no violation of compliance. The committee declared unequivocally that the regulator had failed to prove its suspicion can be translated into a firm case of prosecuting an allegation of violation.
In POINTS: SC panel's findings:
1) SEBI has found out some entities have taken short positions prior to the Hindenburg Report and profited after the price crashed upon the publication of the Report.
2) No Price Manipulation Found
3) No pattern of artificial trading or wash trades among the same parties multiple times was found.
4) No coherent pattern of abusive trading came to light.
5) Adani has taken necessary steps to comfort the retail investors: The empirical data shows the retail investors' exposure to Adani stocks has increased multifold after Jan 24th. The report has also very clearly mentioned that the market was not unduly volatile and the
mitigating measures from Adani Group have helped in building confidence in the stock and the stocks are stable now.
6) No violation found on MPS compliances: Committee is of the view that there is no finding of regulatory failure regarding MPS.
7) The committee has clearly stated that the regulator has not been able to prove that its suspicion can be translated into a firm case of prosecuting an allegation of violation
8) Sufficient compliance with requirement to disclose last natural person above every person owning any economic interest as it was done away with in 2018.
9) Committee has recommended a coherent enforcement policy on RPT
10) Committee has not found any regulatory failure
11) Parties have affirmed on oath that FPI investments are not funded by the Adani Group
12) SEBI has not proved that its suspicion can be translated into a firm case
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- PTC NEWS
