Hindenburg Research accuses Sebi of negligence in addressing Adani Group fraud

Hindenburg Research called out the Securities and Exchange Board of India (Sebi) for failing to address the fraud it alleged in a short-selling report on the Adani Group early last year. The US shortseller received a notice from India’s markets regulator Sebi in June saying the company’s report on the Adani Group contained certain misrepresentations and inaccurate statements meant to mislead readers, it said in a statement published on its website on Monday.

Hindenburg published a report on the ports-to-power conglomerate founded by billionaire Gautam Adani in January 2023, alleging widespread corporate malfeasance from stock price manipulation to related party transactions that it called “the largest con in corporate history”. The Adani Group has repeatedly denied these allegations, which at one point wiped out more than $150 billion in market value of its listed companies. Hindenburg said the company failed to address the issues raised in its report.

The shortseller also said Sebi “seems more interested in pursuing those who expose such practices” while its investigation into the conglomerate has hit a wall. “Sebi has neglected its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimized by it,” Hindenburg said in the statement.

Sebi didn’t immediately respond to Bloomberg’s request for comment. An Adani Group representative did not offer any immediate comment.

In the wake of Hindenburg’s Adani report, India’s Supreme Court ordered Sebi to probe allegations while setting up an expert panel to look into regulatory lapses. In January this year, the top court asked Sebi to wrap up its investigation within three months and said no more probes are needed.