In a relief to embattled billionaire Gautam Adani, a Supreme Court-appointed expert committee said it has found no evidence of stock price manipulation in Adani group companies, while a separate Sebi probe into alleged violation in money flows from offshore entities has “drawn a blank".
The six-member panel, however, said there was evidence of a build-up in short positions on Adani Group stocks ahead of the report of US-based short seller Hindenburg Research that alleged fraud, stock manipulation, and money laundering at the apples-to-port group. Profits were earned from squaring off positions after prices crashed post-publication of the damning allegations.
Financial crime-fighting agency Enforcement Directorate (ED) “found intelligence about potentially violative and concerted selling by specific parties just ahead of the publication of the Hindenburg report, and this may lead to credible charges of concerted destabilisation of the Indian markets, and Sebi ought to be probing such actions under securities laws," it said citing a response from ED.
The committee, headed by former Supreme Court judge Justice AM Sapre, in its 173-page report, said that based on the data from the stock market regulator Securities and Exchange Board of India (Sebi), it saw “no evident pattern of manipulation" in the steep stock price rise in billionaire Gautam Adani’s companies that can be attributed to “any single entity or group of connected entities".
It was not possible to conclude whether there had been regulatory failures regarding price manipulations, the panel said in the report.
After the Hindenburg report stirred a political row and triggered a rout in the conglomerate’s stocks, dethroning Adani as the world’s third richest man, the Supreme Court had on March 2 constituted the expert committee to investigate if there was any failure to disclose transactions with related parties and if stock prices were manipulated.
The committee was to work in parallel with the probe by Sebi into offshore entities investing in the Adani Group. The regulator was first asked to complete the probe in two months and then given another three months till August 14.
These three were at the core of the allegations that Hindenburg had levelled against Adani.
While the report is not the final word, it certainly comes as a relief for Adani’s empire. All 10 Adani Group stocks rose after the report was made public, ending between 1.2 per cent to 7 per cent in late trade.
Flagship Adani Enterprises Ltd and Adani Ports and Special Economic Zone Ltd recovered the day’s losses and jumped 3.5 per cent each.
The panel in its report said Sebi has “drawn a blank" in investigations into suspected violations in overseas investments in the Adani group and pursuing the case could be a “journey without a destination".
The Adani Group has denied all the charges as lies, saying it complies with all laws and disclosure requirements.
The Adani Group has been working on a comeback strategy that includes repaying some debt, buying back some bonds, infusion of fresh investment by way of a nearly USD 2 billion stake buy by a private equity investor, and a planned Rs 21,000 crore fundraising by two group companies.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI)