Shares of Adani Group companies were in the green after a report by a six-member committee appointed by the Supreme Court stated on Friday, May 19, 2023, that it cannot conclude any regulatory failure around the Adani Group- Hindenburg case.
According to the report, there was no regulatory failure in the Adani Hindenburg case in terms of stock price manipulation, and market regulator SEBI had “drawn a blank” in its investigation into potential irregularities in money flows from offshore organizations into the conglomerate.
The group’s flagship entity, Adani Enterprises, surged 18.50% on Monday to reach an intraday high of ₹ 2,318.00 apiece. It was the top gainer on the Nifty 50 and crossed ₹ 10 lakh crore in market value.
By 12:51 PM, Adani Wilmar gained 9.99% and got locked in an upper circuit at 444.30, and Adani Ports traded 8.12% higher at ₹740.25. Meanwhile, five group companies hit the 5% upper circuit. These include Adani Green Energy, Adani Total Gas, Adani Transmission, Adani Power, and New Delhi Television (NDTV).
Adani Group is an Indian multinational conglomerate, headquartered in Ahmedabad. Founded by Gautam Adani in 1988 as a commodity trading business, the group’s businesses include port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure.
The group’s listed companies lost more than $100 billion in market value earlier this year after U.S.-based short-seller Hindenburg Research raised several governance concerns. However, the group denied wrongdoing.
Following this, the Supreme Court asked market regulator the Securities and Exchange Board of India (SEBI) to probe some of the allegations made and submit its findings to a six-member panel formed in March.
The panel is headed by former Supreme Court judge AM Sapre and includes former SBI chairman OP Bhatt, retired Justice JP Devadhar, veteran banker KV Kamath, Infosys co-founder Nandan Nilekani, and advocate Somasekhar Sundaresan, an expert on securities law. The panel submitted its 173-page report to the Supreme Court on May 8.
Here are the key takeaways from the six-member panel’s report:
- Adani Group has revealed all of the company’s beneficial owners.
- SEBI denies making a claim that it is rejecting Adani’s statement of beneficial owners.
- Following the publication of the Hindenburg Report, retail shares of Adani increased.
- After the release of the Hindenburg report, entities earned money on short sales.
- No overt breach of current laws or rules
- SEBI still lacks sufficient information on 42 contributors to assets under management and 13 foreign organizations.
- The report leaves it to SEBI to evaluate whether the pending discovery of 13 entities is necessary and whether a further case needs to be launched.
- SEBI did not make a prima facie accusation when forwarding the case to the Enforcement Directorate.
- Adani stocks have steadied at a new price discovery without causing market instability.
- Adani Group has attempted to reassure investors.
Written by Omkar C
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