A six-member expert panel constituted by the Supreme Court (SC) to oversee investigations into Adani Group has reported that the country's markets regulator, SEBI, has found no evidence of violations by the group's overseas entities. However, according to the committee's unpublished report being circulated in the public domain, there is evidence indicating a buildup in short positions on Adani Group stocks prior to the release of a report by US-based short seller Hindenburg Group.


The committee's report, however, did not provide a conclusive assessment regarding regulatory failure in relation to price manipulations.


In January, Hindenburg Research, a US-based short-seller, raised concerns about governance practices within Adani Group, alleging improper use of tax havens and stock manipulation by the conglomerate. The Adani group has vehemently denied these allegations.


On March 2, the SC constituted a committee headed by retired Supreme Court judge Justice AM Sapre to suggest measures to strengthen regulatory frameworks, investigate the Adani row, and suggest measures to strengthen the statutory framework. The court had directed the SEBI to ensure that all information is provided to the committee. The panel was mandated to make recommendations to strengthen regulations and to protect investors against the volatility of the kind that followed after the Hindenburg report was published. 


Also Read: Adani-Hindenburg Row: Supreme Court Expert Panel Report Finds No Regulatory Failure On Price Manipulation


The key takeaways from the expert panel report



  • The expert panel report concluded that Adani Group has disclosed all beneficial owners. It said that “the FPIs in question have made declarations of the beneficial owner by identifying the natural persons controlling their decisions for purposes of the PMLA.” 

  • The Committee concluded, based on “empirical evidence,” that the Indian market as a whole was not unduly volatile during the period under reference (after publication of the Hindenburg report). The volatility of the Adani stocks was indeed high, which is attributable to the Hindenburg report. 

  • The report said that there was certainly high volatility in the Adani stocks after the publication of the Hindenburg Report. The market's expectations from and confidence in the Adani Group were shaken by the allegations in the Hindenburg Report, which was “inferential.” Although based on publicly available information, the committee questioned the “foundational premises on which the market had priced Adani stocks.”

  • The report said that the “mitigating measures” from the Adani Group such as paring down the debt secured by encumbrances on their shareholding, infusion of fresh investment into Adani stocks by way of investment of nearly $2 billion by a private equity investor, and the like, built confidence in the stocks.

  • The market has re-priced and re-assessed the Adani stocks. While they may not have returned to the pre-January 24, 2023 levels, they are stable at the newly re-priced level. Empirical data shows that retail investors' exposure to Adani stocks has increased after January 24, 2023.

  • According to the report, No pattern of artificial trading or wash trades among the same parties multiple times was found. No coherent pattern of abusive trading came to light. 

  • The report, however, added that SEBI still doesn't have enough info on 13 overseas entities and 42 contributors to assets under management. It has left SEBI to decide if pending the discovery of 13 entities whether any further case is to be made. 

  • The report also said that SEBI, while referring the case to ED, did not make a prima facie charge. 

  • The SEBI has also found that some entities have taken short positions prior to the publication of the Hindenburg Report and have profited from squaring off their positions after the price crashed upon publication of the report.


Meanwhile, the apex court on Wednesday granted the SEBI a three-month extension to complete its investigation into Hindenburg's report against Adani Group. The SC told the SEBI to submit an updated status report on probe into allegations of stock price manipulation by Gautam Adani-led group by August 14.


A bench headed by Chief Justice D Y Chandrachud directed the regulator to file an updated status report of the investigation. The bench, also comprising Justices PS Narasimha and JB Pardiwala, also ordered that the report of the Justice A M Sapre committee, which was submitted to it, be made available to the parties to enable them to assist the court in the matter.