Adani Hindenburg Case Verdict: Supreme Court refuses to transfer probe from SEBI to SIT

Adani Hindenburg Case Verdict: The Supreme Court has on December 3 held that there is no ground to transfer the Adani Hindenberg case investigation from the Securities and Exchange Board of India (SEBI) to a Special Investigation Team (SIT).

In a blow to petitioners, the apex court dismissed reliance on a third-party report and affirmed faith in SEBI's handling of the case. The Government of India and the SEBI are to look into whether there is any infraction of law by the Hindenburg report on short selling and if so, take action following the law, according to the judgement.

“SEBI has completed investigation in 20 out of 22 matters. Taking into account the assurance of the Solicitor General, we direct the SEBI to complete the investigation in the other two cases within three months,” said CJI as quoted by LiveLaw.

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Case Background

A bench comprising Chief Justice D Y Chandrachud and justices J B Pardiwala and Manoj Misra delivered the judgement at 10:30 am today on as many as four petitions.

The judgement on the PILs was reserved on November 24, 2023. The pleas claimed the allegations that the Adani Group, considered close to the Modi government, inflated its share prices and, after the report of the short seller Hindenburg Research, the share value of various group entities fell sharply.

In March 2023, the top court directed the capital markets regulator Securities and Exchange Board of India (SEBI) to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report. The court had also set up an expert committee comprising six members, headed by former top court judge Justice AM Sapre.

Also Read: SC says facts 'do not' warrant transfer of probe to other agency | Top 5 points

Billionaire Gautam Adani's conglomerate saw almost $60 billion of his personal wealth erased last year after US-based short seller Hindenburg Research report accused his group of market manipulation and accounting fraud in January 2023.

In January 2023, US-based short seller Hindenburg Research alleged that Adani Group is involved in accounting fraud, stock price manipulation, and improper use of tax havens.

The report triggered a stock market rout of the Adani group shares that erased close to $150 billion in market value at its lowest point. On its part, the Adani group has rejected all allegations. Following the Hindenburg allegations, the Supreme Court asked market regulator SEBI to look into the matter and submit its findings.

Stocks jumped 18% after the verdict today

Adani Group stocks surged to the tune of 3 percent to 18 percent in intraday trade on Wednesday, January 3, shooting up the overall market capitalisation of the group over ₹15 lakh crore, after the Supreme Court's verdict on petitions seeking an investigation into fraud allegations against Adani Group companies, as outlined in the Hindenburg Research report.

Following the verdict, which is seen as favourable for the Adani Group, shares of flagship firm Adani Enterprises jumped over 9 percent while those of Adani Ports rose 6 percent to its 52-week high of ₹1,144 on the BSE.

Shares of Adani Energy Solutions surged 18 percent while the shares of Adani Power hit their 5 percent upper circuit of ₹544.65.

Shares of Adani Total Gas surged 10 percent and those of Adani Green Energy surged nearly 9 percent. Shares of Adani Wilmar jumped nearly 9 percent.

Moreover, shares of NDTV jumped nearly 11 percent while shares of Ambuja Cements rose about 3 percent to its fresh 52-week highs of ₹549. Shares of ACC, too, climbed nearly 3 percent.