The regulator has also disposed of the instant proceedings against group companies Adani Ports, Adani Power, Gautam Adani and Rajesh Adani.
Sebi also rejected the contention that Adani had engaged in a scheme to conceal related party transactions, pointing out that the widened definition covering indirect transactions was only introduced prospectively via the 2021 amendment to the LODR rules.
Applying it retrospectively, the regulator said, would be legally impermissible.
In a vindication for the Adani Group, Sebi investigation found that alleged loans and fund movements for were fully repaid and did not qualify as undisclosed related party transactions or fraudulent market practices.
In January 2023, Hindenburg Research published a report accusing the Adani Group of accounting irregularities, stock manipulation, and hiding related-party transactions through layers of shell companies. The report triggered a sharp sell-off in Adani stocks, erasing over $100 billion in market value at its peak, and prompted the Supreme Court to direct Sebi to investigate.One of the allegations centred on whether Adani Group used intermediaries such as Milestone and Rehvar to route funds between group entities, effectively bypassing disclosure rules.
Sebi probe found that Adani Ports had extended loans to Milestone and Rehvar, which in turn lent to Adani Power and Adani Enterprises.
These funds, along with applicable interest, were later repaid. The regulator noted that while such arrangements may raise concerns, they could not be termed as “related-party transactions” under the definition prevailing before the 2021 amendment to LODR rules.
“The widened definition covering indirect transactions came into effect only from April 1, 2022, and applying it retrospectively is legally impermissible,” the order stated.
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