February 25, 2026

Adani-Hindenburg: Issues Remain Despite Regulatory Clean Chit

By Our Editorial Team
First publised on 2023-05-20 14:32:04

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The expert committee appointed by the Supreme Court to examine the issue of regulatory failure by market watchdog Securities & Exchange Board of India (Sebi) following the crash in the market price of shares of the Adani group companies after a report by US short-seller Hindenburg alleged that the group had manipulated stock prices and indulged in massive accounting malpractices has submitted its report to the apex court. According to the committee, there is prima facie no evidence of any price manipulation by the Adani group and violation of norms by Sebi.

The terms of reference of the expert committee were limited to examining whether the regulatory framework was robust and had not been violated or misused in any manner which was not detected by Sebi. In that respect, the committee said it found no evidence of the same. The committee categorically stated that "taking into account the explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation."

Although it is clear that the Hindenburg group was a big beneficiary of the price crash in the shares of Adani group companies as it, and others advised by it, had shorted Adani shares before the report was released and in that respect, it can be said to be a mischievous, biased and disruptive entity which released the report to profit from the crash, the fact remains that some of the other charges made in the report - mainly accounting malpractices and having unheard of and small chartered accountant firms (who did not have the infrastructure required to audit companies of that size and could be influenced to clear manipulated accounts)as statutory auditors, among other charges - still need to be investigated. The said charges cannot be investigated by Sebi and its report, that is due by August 14, the new deadline set by the Supreme Court, will not touch on these issues. The Supreme Court would do well to set up a panel of domain (financial) experts to investigate the other charges too.