Adani-Hindenburg | SEBI asks for extension on May 2 deadline; What we know so far

India's market regulator, Securities and Exchanges Board of India (SEBI) has appealed with the Supreme Court for an extension of six months to look into the allegations served against the Adani Group made in the Hindenburg Report. 

The Supreme Court on March 2, created a panel of six members and asked SEBI to furnish all information to the committee looking into alleged violations of securities laws and insufficient disclosure of data by the company. SEBI has made the application for the revision of deadline on Saturday.

New York based short seller, Hindenburg had levelled allegations against the Adani group in a report for violations of regulatory norms and financial irregularities in January 2023. The report which has alleged the Adani group for stock market allegations led to significant wealth-wipe off of Gautam Adani leading to a dip in the company stocks. However, announcements of debt payoffs led to a recovery in the markets in the ensuing period. 

Adani Group in a detailed response to the Hindenburg report counter-accused Hindenburg and stated that the report was made "to create a false market in securities to enable Hindenburg to book massive financial gain through wrongful means...a calculated attack on India..."

Adani Group has been over the last two months been making periodic announcements of debt payoffs. According to company sources, "the group has since January, paid off $4 billion in debts." 

The SEBI investigation into the report is crucial as it will reveal whether the allegations of Hindenburg report stand correct or not. SEBI, according to reports has submitted that the additional time will be required to look into the 12 suspicious transactions and their sub-transactions which have been highlighted in the Hindenburg report and will involve procurement of data from international banks.

The court-appointed six-member panel is headed by former Supreme Court Judge, Abhay Manohar Sapre, former SBI chairman OP Bhatt, former Bombay High Court judge JP Devadhar, Chairman, National Bank for Financing Infrastructure (NabFID) KV Kamath, Infosys co-Founder, Nandan Nilekani and Securities Lawyer, Somasekhar Sundaresan.

What is Hindenburg?

Hindenburg Research describes itself as a forensic financial research company and an activist short seller. It focuses on analysing accounting irregularities, bad actors in management, undisclosed transactions, illegal/unethical business or financial reporting practices. According to a Bloomberg report, the firm employs 10 people, mostly former journalists and analysts.