By Ravi Ranjan Prasad
Copyright deccanchronicle
Mumbai: Securities and Exchange Board of India(Sebi) has dismissed US short seller Hindenburg Research’s allegations of related party dealings against eight Adani Group entities including Group chairman Gautam Adani in its final 44 page order issued on Thursday.The order passed by Sebi whole time member Kamlesh C. Varshney disposed of proceedings against Gautam Adani, Rajesh Adani, group CFO Jugeshinder Singh, Adani Enterprises, Adani Ports & Special Economic, Adani Power ,Milestone Tradelinks and Rehvar Infrastructure as the market regulator could not establish the allegations. Hindenburg published a report on January 24, 2023, against Adani Group which alleged that Adani Enterprises and Adani Power Mundra (now merged with Adani Power) was funded by Milestone Tradelinks and Rehvar Infrastructure through Adani Infra (India) in FY 2020-21. Further, Hindenburg questioned the original source of funds of Milestone Tradelinks and Rehvar Infrastructure. Sebi order while disposing of Hindenburg allegations argued that the 2021 amendment to the Listing Obligations and Disclosure Requirements(LODR) regulations related to related party transactions cannot apply to past transactions. Related party transactions definition didn’t apply to the challenged/impugned transactions as the amendments were made afterwards. “This amendment was made effective from a prospective date of April 1, 2022 and also provided a glide path till April 1, 2023,” Sebi order contended. Whereas the transactions between Adani Group entities took place during FY 2018-19 to FY2022-23. “Once there is no violation of provisions of the LODR Regulations as impugned transaction is not related party transaction; and the amount has come back with interest in normal due course before the start of the investigation, it would be incorrect to categorise such transaction as manipulative or fraudulent transactions or unfair trade practice unless there are other evidences which proves that there is actually a fraud in these transactions, Sebi order said. “However, in the instant case, there is no such allegation or evidence in the SCN. Hence, it is held that facts of this case do not meet the requirement of the definition of the term “Fraud”. Hence, it is held that for this reason there is no violation of provisions of Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market(PFUTP) regulation by noticees,” the order said.
