India’s top court rules in favor of Adani conglomerate

In a major win for billionaire Gautam Adani, the court refused a special probe into “stock manipulation”

India’s Supreme Court on Wednesday refused to order a special probe into allegations of stock-market manipulation against Adani Group, a conglomerate owned by the country’s second richest man Gautam Adani, allegations made last year by American research firm Hindenburg.

In a major relief for Adani, the court directed the stock-market regulator Securities and Exchange Board of India (SEBI) to complete its ongoing investigation within a period of three months.

The Hindenburg report, released in January last year, described the Adani Group as “highly overvalued” and claimed that it had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.” This caused the valuation of the group to dip by about $145 billion in market value at its lowest point.

In the aftermath of these accusations, a group of public interest litigations (PILs) was filed in the Supreme Court by Advocates Vishal Tiwari, ML Sharma, Congress party leader Dr Jaya Thakur, and activist Anamika Jaiswal, seeking a court-monitored probe into the matter. 

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The apex court reserved its verdict after the conclusion of arguments on November 24. In Wednesday’s ruling, the Supreme Court held there was no ground to “doubt” an investigation carried out by the SEBI. The bench also noted that the regulator has already completed its investigation in 22 out of 24 cases against the Adani Group that it is probing.

Following the Supreme Court verdict, the share prices of several companies within the conglomerate surged by a combined 18% in the early trading hours of Wednesday.

Gautam Adani tweeted that the judgment shows that “truth has prevailed” and said he was grateful to those who stood by the Adani Group. “Our humble contribution to India’s growth story will continue,” he posted on X (formerly Twitter). According to the Bloomberg Billionaires Index, Gautam Adani has a net worth of $85.9 billion.

Siddharth Luthra, Adani Group’s advocate, said in a conversation with news agency PTI that the verdict could be a “clean chit” to Adani, as “the Supreme Court has taken a view that the report on 20 out of 22 transactions is clear.”

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The bench, headed by Chief Justice DY Chandrachud, also noted that petitioners had relied on reports by newspapers and the Organised Crime and Corruption Reporting Project (OCCRP), an international investigative platform known for its work on the ‘Panama Papers’ and ‘Pandora Papers.”

“Such reports by independent groups or investigative people by newspapers may act as inputs before the SEBI or the Expert Committee. However, they cannot be relied upon as conclusive proof of the inadequacy of the investigation by SEBI”, the chief justice said, delivering the judgment.

Notably, Adani has pointed out in a statement that the OCCRP is funded by several governments and non-government organizations, including the Open Society Foundation (OSF) of the American investor-turned-philanthropist George Soros “who has openly declared his hostility against the Adani Group.” Soros had previously raised questions about Indian Prime Minister Narendra Modi and Adani being “close allies.”

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