The Supreme Court on Wednesday refused to transfer an investigation into allegations of round-tripping and money laundering by the Adani Group from the Securities and Exchange Board of India to a Special Investigation Team, reported Live Law. The court, in a significant judgment, limited its scope to review of SEBI's actions and refused to set up a special investigation team (SIT) or transfer the probe from the market regulator. The apex court, however, directed SEBI to expedite its ongoing investigations into two of the 24 cases arising from the Hindenburg report, setting a three-month deadline for completion. Additionally, the court recommended that the government and SEBI consider acting on the findings of a court-appointed panel that examined the matter earlier this year.
The Hindenburg Research report, published in January 2023, accused the Adani Group of "brazen accounting fraud" and "stock manipulation." The Adani Group vehemently denied the allegations, calling them "malicious" and "unfounded." The report triggered a dramatic sell-off in Adani stocks, erasing over $140 billion in market value within days and forcing the cancellation of a ₹20,000 crore share sale. In response to the controversy, the Supreme Court in March formed a six-member panel headed by retired Justice A.M. Sapre to investigate potential regulatory lapses by SEBI and alleged violations by the Adani Group. The panel's report, submitted in September, found no conclusive evidence of stock manipulation or violation of market norms by Adani companies. Today's Supreme Court judgment effectively upholds the findings of the court-appointed panel and leaves the task of further investigation with SEBI. While the court has not exonerated the Adani Group, its decision to refrain from a direct intervention is seen as a significant win for the conglomerate.