The Securities and Exchange Board of India on Thursday cleared the Adani Group in connection with an allegation raised by United States-based Hindenburg Research that the conglomerate routed funds through three entities to hide related-party transactions.

In two separate orders, the markets regulator said that allegations against the industrialist Gautam Adani-owned conglomerate could not be established. It said that “there was no question” of devolvement of any liability on the Adani Group, adding that no penalty had been imposed.

The orders cleared Gautam Adani, his brother Rajesh Adani and key Adani Group firms – Adani Ports and SEZ, Adani Power and Adicorp Enterprises, The Indian Express reported.

The investigation pertained to allegations that Adicorp Enterprises, Milestone Tradelinks and Rehvar Infrastructure were used as a conduit to route funds from several Adani Group companies to fund Adani Power and Adani Enterprises.

In its order, the Securities and Exchange Board of India said that the transactions did not qualify as related-party dealings, the definition of which was expanded only after a 2021 amendment.

Loans were repaid with interest, no funds were siphoned off, and hence there was no fraud or unfair trade practice, it added.

The Adani Group had been facing an investigation by the Securities and Exchange Board of India since Hindenburg Research alleged in January 2023 that the conglomerate was pulling off the “largest con in corporate history”.

In a report, the short-seller claimed that the Adani Group was involved in stock manipulation, accounting fraud and money laundering.

The Adani Group has rejected the allegations and denied any wrongdoing. But the report had triggered a rout in stocks of the conglomerate’s seven listed companies, which collectively lost more than $100 billion in market valuation.

The Supreme Court had ordered the Securities and Exchange Board of India to inquire into the matter in March 2023.

In January, Nate Anderson, the founder of Hindenburg Research, said that he was disbanding the firm, citing no specific reason for the move.

Adani hails SEBI order

Following the publication of the orders, Gautam Adani said that the Securities and Exchange Board of India has reaffirmed what the conglomerate had always maintained, “that the Hindenburg claims were baseless”.

The industrialist said transparency and integrity had always defined the Adani Group.

“We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report,” he said on social media. “Those who spread false narratives owe the nation an apology. Our commitment to India’s institutions, to India’s people and to nation building remains unwavering.”

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