Updated January 3rd, 2024 at 16:30 IST

Adani-Hindenburg case: All you need to know about Supreme Court ruling

SEBI to complete its investigation in the remaining two cases into the Adani Group within three months.

Priyanshi Mishra
Adani Supreme Court hearing
Adani Supreme Court hearing | Image:Republic

In January 2023, the Supreme Court issued a decision on petitions demanding an inquiry into charges of accounting fraud and stock manipulation against Adani Group firms, which were alleged in a research report by US short-seller Hindenburg Research. After the completion of the arguments on November 24, the CJI declared the decision in the case that had been reserved. The top court ruled that the report by Hindenburg "or anything like that" cannot be used as the foundation for a further investigation. It further asked the Securities and Exchange Board of India (SEBI) to proceed with its investigation in accordance with the law.

What did SC say?

  • Supreme Court ruling was issued on petitions regarding allegations against Adani Group's stock manipulation and irregularities from a year ago by Hindenburg Research.
  • Chief Justice of India (CJI) emphasised SEBI's arguments, stating there is no reason to intervene in legislative powers; regulations aren't illegal but face regulatory failure.
  • Petitioners' plea is deemed an afterthought and lacking grounds; the court cannot supplant SEBI's role but can transfer the probe sparingly under articles 32 and 142.
  • Court highlighted the inadequacy of newspaper reports and third-party organisations to cast doubt on SEBI's probe; they serve as inputs but aren't conclusive evidence.
  • Stress on the Court's limited intervention in transferring probes to agencies like the CBI, requiring strong evidence of biassed investigation.
  • Emphasis on the court's reluctance to replace SEBI's role and the necessity for petitioners to present substantial proof of investigative bias.

What had happened?

Hindenburg's investigation, which was published in January 2023, accused "brazen accounting fraud" and "stock manipulation" by the Gautam Adani-led business. Despite the fact that the conglomerate dismissed the claim as "unresearched" and "maliciously mischievous," it caused a large sell-off of Adani Group equities, which lost over $140 billion in days and forced the cancellation of a Rs 20,000 crore share sale.

In March, the Supreme Court appointed a six-member team, chaired by retired Supreme Court judge AM Sapre, to investigate SEBI's regulatory failures and the Adani Group's alleged violations of laws. However, the committee stated in its report two months later that the claims of stock price manipulation or breach of MPS guidelines by Adani Group firms cannot be proven "at this stage."


At the same time, the panel voiced certain concerns about the present Foreign Portfolio Investor (FPI) restrictions. The Supreme Court ruled in November that it would be improper for the court to constitute a SIT to investigate suspected violations of MPS guidelines by Adani Group firms without proof of errors on the side of the SEBI, which is currently probing the case.

What to expect?

The court has directed SEBI to complete the remaining investigation into the Adani group efficiently, preferably within three months. CJI has asked the government of India and SEBI to look into if there has been any infaction of law by the Hinderburg report on short selling and, if found, take the necessary actions.

What did Adani say?

Reacting to the ongoing ruling, Gautam Adani shared on X, "The Hon'ble Supreme Court's judgement shows that truth has prevailed. Satyameva Jayate. I am grateful to those who stood by us. Our humble contribution to India's growth story will continue."

How market reacted?

Adani Enterprises shares are down 5 per cent from the day's high, while Adani Ports is down 4.4 per cent from its high. 

Meanwhile, Adani Energy Solutions and Adani Total Gas have fallen 6 per cent and 3 per cent from their respective day's highs, respectively.


Published January 3rd, 2024 at 13:22 IST

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