Adani Group's stocks fell after Hindenburg Research accused the head of India's market regulator of having conflicts of interest that allegedly prevented a thorough probe into the US-based short seller's claims of manipulation and fraud at the conglomerate.
Shares of Adani Enterprises Ltd., the group's flagship, slid as much as 5.3 per cent in early Mumbai trading on Monday, before paring some of their declines. Adani Energy Solutions Ltd. plunged as much as 17 per cent as all of the conglomerate's 10 stocks dropped. The NSE Nifty 50 Index, India's equity benchmark, fell 0.5 per cent to underperform the broader Asian market.
In a report published Saturday, Hindenburg said Madhabi Puri Buch "- the chairperson of the Securities and Exchange Board of India "- and her husband, Dhaval Buch, invested in offshore entities that were allegedly part of a fund structure in which Vinod Adani "- the brother of billionaire Gautam Adani "- also had investments. Buch denied the allegations.
The investments by the couple were made in 2015, two years before Buch joined Sebi, Hindenburg said, citing whistleblower information and other documents Bloomberg wasn't able to verify. The fund structure is managed by India Infoline, a financial services and wealth management firm. Buch was appointed a full-time member of Sebi in 2017. In 2022, she was named chair.
The face-off between Hindenburg and Sebi is escalating weeks after the US-based firm was queried by the Indian regulator about its scathing report against Adani in early 2023.
The report sparked a selloff in Adani stocks, wiping out more than $150 billion in their combined market value at its worst. It led India's top court to order a Sebi probe on possible Adani violations and any suspicious trading activity. Sebi has yet to make a case against the Adani Group.
