Supreme Court Reschedules Adani-Hindenburg Case Hearing Amid Sebi’s Status Report

The Supreme Court of India has postponed the hearing for the Adani-Hindenburg case involving a status report submitted by the Securities and Exchange Board of India (Sebi), the nation’s capital markets regulatory body. Media reports suggest that the Chief Justice of India-led constitution bench will continue to address petitions contesting the revocation of Article 370. However, independent confirmation of this development is not available.

Sebi presented a status report on August 25, detailing its investigation into allegations made by short-seller Hindenburg Research in a January report against the diversified conglomerate Adani, which is engaged in port and energy operations. Sebi highlighted the challenge of determining the financial stakes of shareholders among the 12 Foreign Portfolio Investors (FPIs) due to their offshore tax haven locations.

The report stated that Sebi is awaiting data from five offshore tax havens to ascertain the true beneficiaries behind foreign investors associated with the Adani group. The Enforcement Directorate (ED) found that short selling of Adani stocks led to profits for 12 firms, including two Indian companies, one registered in New Delhi and another in Mumbai.

Hindenburg Research’s concerns prompted Sebi’s investigation into the Gautam Adani-led group, causing a reduction of over $100 billion in the combined market worth of the conglomerate’s businesses. The violations primarily pertain to related-party transactions’ disclosure, with the inquiry uncovering instances where offshore fund holdings in some Adani companies didn’t comply with regulations.

The regulatory authority stated that penalties for violations could reach a maximum of 10 million rupees ($121,000) for each breach by each entity. While the infractions are expected to result in financial penalties, Sebi is withholding the report’s public release until its decisions on the Adani investigation are issued. The inquiry is nearing its conclusion, with key findings pointing to related-party transaction disclosure non-compliance and offshore fund holding discrepancies.