Supreme Court gives Sebi 3 months for pending probes in Adani-Hindenberg case
NEW Delhi: Adani-Hindenburg Case Verdict: The Supreme Court of India rejected key demands of petitioners seeking to derail the ongoing SEBI investigation into allegations raised by Hindenburg Research. The apex court dismissed reliance on a third-party report and affirmed faith in SEBI's handling of the case.
The Government of India and the Sebi are to look into whether there is any infraction of law by the Hindenburg report on short selling and if so, take action by the law, according to the judgment.
The top court pronounced its verdict today i.e. on 3 January, on a batch of petitions seeking examination of allegations of fraud made against Adani Group of companies in the Hindenburg Research report. The pleas claimed the allegations that the Adani Group, considered close to the Modi government, inflated its share prices and, after the report of the short seller Hindenburg Research, the share value of various group entities fell sharply.
Adani-Hindenburg Case Verdict: Chronology of events
January 24: Hindenburg Research releases a report on the Adani Group companies claiming that it was "engaged in a brazen stock manipulation and accounting fraud". This came a few days before the flagship Adani Enterprises company of the Adani group will make a ₹20,000 crore follow-on public offer (FPO). The conglomerate has responded by calling the report "malicious" and "baseless," claiming it was created with the malicious intent to sabotage its share sale.
January 26: Adani Group says it is considering legal action against Hindenburg Research. The short seller maintains its position and declares that it will request disclosures from the business in legal proceedings.
January 27: Adani Enterprises' FPO opens for subscription. While a 1% subscription is seen in the Adani Enterprises FPO on the first day, Abu Dhabi’s International Holding contributed $400 million to the FPO in support of Adani.
January 31: The FPO was fully subscribed.
February 1: Credit Suisse's private bank halted margin loans on Adani Bonds. The Swiss lender’s private banking arm assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Electricity Mumbai. The same day, Adani Group stocks lost $86 billion, forcing the Securities and Exchange Board of India (SEBI) to launch a probe. Later that night, Adani Group called off the Adani Enterprises FPO.
February 2: It was revealed that the State Bank of India (SBI) had given $2.6 billion to companies in the Adani conglomerate. SBI’s exposure included $200 million from its overseas units. Also, opposition parties created an uproar in the Parliament and asked for a constitution of a Joint Parliamentary Committee (JPC) into the alleged irregularities by the Adani group of companies.
The Supreme Court dismisses petitioners' demands, and upholds SEBI investigation in Adani-Hindenburg case. (Reuters)
Adani-Hindenburg Case Verdict: The Supreme Court of India rejected key demands of petitioners seeking to derail the ongoing SEBI investigation into allegations raised by Hindenburg Research. The apex court dismissed reliance on a third-party report and affirmed faith in SEBI's handling of the case.
The Government of India and the Sebi are to look into whether there is any infraction of law by the Hindenburg report on short selling and if so, take action by the law, according to the judgment.
The top court pronounced its verdict today i.e. on 3 January, on a batch of petitions seeking examination of allegations of fraud made against Adani Group of companies in the Hindenburg Research report. The pleas claimed the allegations that the Adani Group, considered close to the Modi government, inflated its share prices and, after the report of the short seller Hindenburg Research, the share value of various group entities fell sharply.
Adani-Hindenburg Case Verdict: Chronology of events
January 24: Hindenburg Research releases a report on the Adani Group companies claiming that it was "engaged in a brazen stock manipulation and accounting fraud". This came a few days before the flagship Adani Enterprises company of the Adani group will make a ₹20,000 crore follow-on public offer (FPO). The conglomerate has responded by calling the report "malicious" and "baseless," claiming it was created with the malicious intent to sabotage its share sale.
January 26: Adani Group says it is considering legal action against Hindenburg Research. The short seller maintains its position and declares that it will request disclosures from the business in legal proceedings.
January 27: Adani Enterprises' FPO opens for subscription. While a 1% subscription is seen in the Adani Enterprises FPO on the first day, Abu Dhabi’s International Holding contributed $400 million to the FPO in support of Adani.
January 31: The FPO was fully subscribed.
February 1: Credit Suisse's private bank halted margin loans on Adani Bonds. The Swiss lender’s private banking arm assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Electricity Mumbai. The same day, Adani Group stocks lost $86 billion, forcing the Securities and Exchange Board of India (SEBI) to launch a probe. Later that night, Adani Group called off the Adani Enterprises FPO.
February 2: It was revealed that the State Bank of India (SBI) had given $2.6 billion to companies in the Adani conglomerate. SBI’s exposure included $200 million from its overseas units. Also, opposition parties created an uproar in the Parliament and asked for a constitution of a Joint Parliamentary Committee (JPC) into the alleged irregularities by the Adani group of companies.
February 3: While maintaining the rating, S&P Global Ratings changed the outlook for Adani Ports and Adani Electricity from stable to negative. Effective from this day, three Adani group companies, including Adani Enterprises, came under the short-term additional surveillance measure (ASM) framework of the National Stock Exchange (NSE). LIC revealed that it held a 4.23% stake in Adani Enterprises while it held a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.
February 6: Reports suggested that bonds issued by companies in the Adani Group were no longer accepted by Standard Chartered as security for margin lending.
February 10: The Supreme Court said a strong system is needed to safeguard investor interests. It requests opinions on arguments claiming investor exploitation and "artificial crashing" of the Adani Group's stock value from both the Centre and Sebi. It also aims to form a committee of experts.
February 13: The Central government agreed with the Supreme Court's proposal to set up an expert panel to look into strengthening the regulatory mechanisms for the Indian equity market.
February 14: Sebi informs the Supreme Court that it is looking into the claims made in the Hindeburg report against the Adani group. Additionally, it states that it is keeping an eye on market activity both before and after the report's release.
March 2: The top court orders the formation of a committee to look into the Adani Group and recommend ways to improve the legal framework that safeguards Indian investors. AM Sapre, a former SC judge, was named the committee's head. Other members of it include Somasekharan Sundaresan, KV Kamath, and Nandan Nilakeni.
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