Context:
On September 18, 2025, the Securities and Exchange Board of India (SEBI) concluded its investigation into allegations by U.S.-based shortseller Hindenburg Research against the Adani Group. The case mainly involved Adani Ports & SEZ Ltd. and Adani Power Ltd.
Background:
- Hindenburg Report (Jan 2023):
- U.S.-based short-seller Hindenburg Research accused the Adani Group of stock price manipulation, accounting irregularities, and use of offshore shell companies.
- Impact:
- Adani Group companies lost over $100 billion in market capitalization within weeks.
- Concerns raised about transparency, corporate governance, and investor protection in Indian markets.
Role of SEBI in the Case
- Market Watchdog: Ensured that any alleged manipulation or irregularity in Adani stocks was thoroughly probed.
- Investor Protection: Addressed concerns of lakhs of investors impacted by stock volatility.
- Regulatory Oversight: Investigated FPIs linked to the Adani Group to check for round-tripping of funds.
- Judicial Accountability: Submitted reports directly to the Supreme Court, enhancing transparency.
- Policy Impact: Case led to discussions on tightening rules on disclosure norms, FPI transparency, and corporate governance.
Important SEBI Acts and Regulations (For Exams)
| Act/Regulation | Year | Purpose/Key Provisions | Exam Relevance |
|---|---|---|---|
| SEBI Act | 1992 | Establishes SEBI as market regulator; protects investors, promotes fair trading, regulates intermediaries. | Foundation of SEBI’s powers, must know sections like Section 11 (functions of SEBI). |
| Securities Contracts (Regulation) Act – SCRA | 1956 | Governs listing, recognition of stock exchanges, and trading of securities. SEBI empowered to regulate stock exchanges. | Important for listing rules, delisting, recognition of stock exchanges. |
| Depositories Act | 1996 | Provides framework for dematerialisation and working of depositories like NSDL, CDSL. | Related to demat accounts, electronic shareholding. |
| Companies Act (SEBI-linked provisions) | 2013 | Covers corporate disclosures, corporate governance, issue of securities, shareholder protection. | SEBI coordinates with MCA, exam focus on disclosure & governance norms. |
| Prevention of Fraudulent and Unfair Trade Practices (PFUTP) Regulations | 2003 | Prevents price rigging, insider trading, circular trading, misleading disclosures. | Invoked in Adani–Hindenburg type probes. |
| Listing Obligations and Disclosure Requirements (LODR) Regulations | 2015 | Prescribes disclosure norms for listed companies (quarterly results, shareholding patterns, related-party transactions, corporate governance). | Core for corporate governance & transparency. |
| Foreign Portfolio Investors (FPI) Regulations | 2019 | Regulates investment by foreign institutional investors (FIIs/FPIs). Defines categories of FPIs. | Key for exam after Adani–Hindenburg controversy. |
