Adani-Hindenburg Case: A Recap Of The Saga In 10 Points

To understand the complex case, let’s take a look at the timeline to see how the Adani-Hindenburg saga unfolded.

The report released by Hindenburg last year caused volatility in the stock market in India and the Adani Group stocks witnessed a freefall, losing over $100 billion worth of market value within days. 

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Adani Hindenburg Case: The Supreme Court on Wednesday announced its verdict in the Adani-Hindenburg case and refused to transfer the investigation from SEBI to SIT. To understand the complex case, let’s take a look at the timeline to see how the Adani-Hindenburg saga unfolded.

January 24, 2023

Hindenburg Research releases a report titled ‘How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’ on the Adani Group firms alleging that the companies were involved in stock manipulation, accounting fraud, and excessive debt. This causes volatility in the stock market in India and the Adani Group stocks witness a freefall, losing over $100 billion worth of market value within days. 

Aftermath

The Adani Group terms the report ‘malicious’ and ‘baseless’. The conglomerate says that is exploring legal options against Hindenburg Research. 

Adani’s FPO opens for subscription and attracts 1.12 times the subscriptions. However, no domestic financial institution or mutual fund bids for the 3-day-long FPO. 

February 2023

The Opposition parties call for a Joint Parliamentary Committee (JPC) in Parliament to probe the allegations against the Adani Group. The Supreme Court looks into setting up an expert committee. The Government agrees to the apex court’s proposal to establish a panel regarding strengthening the regulatory framework of the Indian stock market. Investigations begin. Indian authorities, such as the Securities and Exchange Board of India (SEBI) and the Directorate of Revenue Intelligence (DRI) launch probes into the allegations. 

FPO Cancelled

Adani Enterprises calls off the FPO worth Rs 20,000 crore. Gautam Adani says, “The interest of the investors is paramount, and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.”

March 2023

The Supreme Court mandates the setting up of a committee to probe the allegations. Former SC judge A M Sapre is appointed as the head of the committee. The court also asks SEBI to look into the crash of the Adani Group stocks.

April-May 2023

Adani stocks display some signs of recovery, however, market sentiment remains cautious. SEBI requests the Supreme Court for a six-month extension to complete its probe into the allegations of stock price manipulation, and the SC instructs SEBI to finish the investigation by August 14. 

The panel set up by the Supreme Court says that it is difficult to find the regulatory failure in the Adani-Hindenburg saga. The panel concludes that it didn’t find any pattern of artificial trading. 

June-July 2023

To regain investor confidence, the Adani Group prepays some of its loans and reveals plans to strengthen its corporate governance 

August-September 2023

The deadline approaches, however, SEBI fails to complete its investigation and states the complexity of the case as the reason. This delay raises concerns about the effectiveness of the investigation.SEBI says, “Out of the said 24 investigations/examinations, 17 are final and complete and approved by the competent authority in accordance with Sebi's extant practice and procedures”. 

October-November 2023

 The Supreme Court expresses its concerns about the SEBI’s progress. The court reserves its verdict on a batch of pleas regarding the Adani-Hindenburg row on allegations of stock price manipulation. 

January 2024

 The Supreme Court announces its judgement and states that there is no ground to transfer the investigation from SEBI to SIT. "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 3 months," CJI D Y Chandrachud reads as part of the apex court’s verdict. The apex court directs SEBI to conclude the probe into two pending cases withing three months.