SEBI Clears Adani Group of Hindenburg Allegations in Key Probe

SEBI Concludes Adani-Hindenburg Probe, Finds No Violations

The Securities and Exchange Board of India (SEBI) has officially closed its proceedings against the Adani Group, its key executives, and two private entities, Milestone Tradelinks Pvt. Ltd. (MTPL) and Rehvar Infrastructure Pvt. Ltd. (RIPL), effectively dismissing allegations of related-party transaction violations raised by Hindenburg Research. In a final order dated September 18, 2025, SEBI concluded that the allegations were 'not established' and issued no punitive directions.

The market regulator's decision marks a significant development following intense scrutiny that began in January 2023, when the U.S. short-seller Hindenburg Research published a report accusing the Indian conglomerate of 'brazen stock manipulation and accounting fraud schemes over the course of decades.'

Background of Hindenburg's Allegations

Hindenburg Research's report, published on January 24, 2023, questioned the funding of Adani Enterprises Ltd. (AEL) and Adani Power (APL) through MTPL and RIPL. The report alleged that the Adani Group routed funds through these and other entities, such as Adicorp Enterprises, to conceal related-party transactions and potentially mislead investors. Specifically, Hindenburg claimed that Adani entities had used associated companies to funnel funds into listed firms, thereby avoiding disclosure requirements under India's related-party rules.

The allegations triggered a dramatic sell-off, wiping out more than $150 billion in market value at one point across Adani's listed entities.

SEBI's Investigation and Findings

SEBI's investigation, which spanned from financial years 2018-19 to 2022-23, examined whether the alleged loans amounted to undisclosed related-party transactions or fraudulent activities. The regulator issued a show-cause notice (SCN) in January 2024, alleging that MTPL and RIPL were used as 'conduits' to facilitate undisclosed related-party transactions.

However, in its final orders, SEBI found no evidence to support Hindenburg's claims. Key findings included:

• The transactions in question did not qualify as related-party transactions under the regulatory framework existing during the investigation period.
• The definition of related-party transactions was expanded only after a 2021 amendment, which came into effect from April 1, 2023, and could not be applied retrospectively.
• SEBI concluded that the alleged loans and fund movements were genuine commercial transactions, fully repaid with interest, and did not involve any siphoning off of funds or diversion of money.
• The regulator stated that there was no violation of SEBI's disclosure norms, and therefore, no basis for assigning liability or imposing penalties on the Adani entities or their executives, including Gautam Adani and Rajesh Shantilal Adani.

SEBI board member Kamlesh C. Varshney ruled that the allegations by Hindenburg were 'not established.'

Adani Group's Response and Broader Context

Following SEBI's clearance, Gautam Adani, Chairman of the Adani Group, stated on X (formerly Twitter) that SEBI's findings 'reaffirmed what we have always maintained, that the Hindenburg claims were baseless.' He added, 'Transparency and integrity have always defined the Adani Group.' The Adani Group also issued a statement indicating that the final order 'exposed the falsity of the claims widely amplified by the short-seller.'

While SEBI's ruling addresses the specific allegations of stock manipulation and related-party transactions, it is important to note that other aspects of the Hindenburg report, which alleged extensive corporate fraud and governance failures, have been subject to separate scrutiny. The fallout from the allegations prompted India's Supreme Court to direct SEBI to conduct a detailed investigation. Additionally, the Adani Group continues to face other international legal pressures, including a probe by U.S. federal prosecutors regarding a $250 million bribery scheme, in which Gautam Adani was indicted in November 2024.