Adani Group Cleared: SEBI Finds No Violation in NDTV Acquisition Amidst Hindenburg Allegations

In a significant development that brings clarity to a high-profile corporate saga, India’s capital market regulator, the Securities and Exchange Board of India (SEBI), has officially exonerated billionaire Gautam Adani, along with his brother Rajesh Adani and nephew Vinod Adani, from allegations of violating disclosure requirements in connection with the Adani Group's acquisition of news broadcaster NDTV.

The ruling effectively dismisses the claims made by Hindenburg Research, which had accused the Adani Group of non-disclosure regarding the "ultimate beneficial ownership" in the intricate transaction.

SEBI's meticulously detailed investigation concluded that these allegations were "unsubstantiated" and, in fact, based on "conjectures," thereby reaffirming the Adani Group's adherence to regulatory norms in this particular instance.

The heart of the matter revolved around the Adani Group's acquisition of a 29.18% stake in NDTV.

This significant shareholding was obtained through Vishvapradhan Commercial Private Limited (VCPL), a wholly-owned subsidiary of AMG Media Networks Limited, which itself falls under the umbrella of Adani Enterprises Ltd. The complex deal originated from a loan provided by VCPL to the promoters of NDTV back in 2007-08, which included warrants convertible into shares.

Hindenburg Research, in its widely publicized report, had raised concerns about the transparency of this arrangement, particularly regarding whether the true beneficial owners were adequately disclosed and if there were undeclared related party transactions.

SEBI's comprehensive probe delved deep into the specifics of the transaction, scrutinizing documentation and legal frameworks.

The market watchdog's order, dated January 15, 2024, serves as a definitive statement, concluding that there was no breach of the relevant regulatory provisions by Gautam Adani, Rajesh Adani, or Vinod Adani. This outcome is a crucial vindication for the Adani leadership, particularly in the wake of intense scrutiny following Hindenburg's critical report.

The decision underscores the regulator's commitment to thorough investigation while also providing a measure of relief and certainty for the Adani Group, which has been navigating various allegations and market volatility since early 2023.

This exoneration is expected to contribute positively to investor confidence and the group's standing, as it addresses one of the specific regulatory concerns that emerged from the broader Hindenburg report.