Mumbai: The Securities and Exchange Board of India (SEBI) has issued a statement urging investors to remain calm and conduct thorough research before reacting to the Hindenburg Research report on the Adani Group. SEBI emphasized that investors should take note of the disclaimer in the report, which states that Hindenburg Research may have short positions in the securities covered.
In its statement, SEBI refuted the charges made by the US-based short seller, stating that the allegations against the Adani Group have been duly investigated. The market regulator pointed out that the Supreme Court, in its January 3, 2024 order, noted that SEBI had completed 22 out of 24 investigations into the Adani group. Subsequently, one more investigation was completed in March 2024, with the final investigation nearing completion.
SEBI detailed the extensive nature of its investigations, revealing that more than 100 summons, around 1,100 letters and emails have been issued to seek information. The regulator has also made over 100 communications seeking assistance from domestic and foreign regulators and external agencies and examined more than 300 documents containing around 12,000 pages.
The market regulator addressed the show cause notice issued to Hindenburg Research on June 27, 2024, stating that it was issued following due process of law for violation of securities laws. SEBI noted that Hindenburg Research has made the show cause notice available on its website, and the proceedings in this matter are ongoing.
In response to allegations that SEBI’s Real Estate Investment Trust (REIT) regulations had benefitted a large multinational financial conglomerate, the regulator clarified that these regulations were amended from time to time and implemented after a robust consultation process involving various stakeholders. SEBI emphasized that claims of favouritism towards any particular entity were inappropriate.
The statement also addressed concerns about potential conflicts of interest, noting that SEBI has adequate internal mechanisms in place. It was revealed that the SEBI Chairperson has recused herself in matters involving potential conflicts of interest and has made relevant disclosures regarding holdings of securities and their transfers.
This statement from SEBI comes in the wake of fresh allegations by Hindenburg Research against SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch. The couple has since issued a detailed statement rejecting these allegations.
The ongoing saga dates back to January 2023, when Hindenburg published a report accusing the Adani Group of financial irregularities, leading to a significant drop in the company’s stock price. In January 2024, the Supreme Court directed SEBI to complete its probe into two pending cases within three months, refusing to transfer the investigation to a Special Investigation Team (SIT).
As the investigation continues, SEBI maintains its commitment to protecting investors and ensuring the integrity of the Indian securities market.
