The Adani Group, a major player in India’s stock market, faced significant turbulence on Monday as its shares dropped sharply. This decline came in the wake of fresh allegations from Hindenburg Research, which accused the Chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, of having ties to offshore entities allegedly connected to a money siphoning scheme involving the Adani Group.
Adani Group Stocks Take a Hit :
The market was quick to respond to the news, with Adani Enterprises, the group’s flagship company, experiencing a 3.09% drop in its share price on the Bombay Stock Exchange (BSE). Adani Energy Solutions was hit even harder, opening with a dramatic 17% loss. Other companies within the group also suffered: Adani Power fell by 4.98%, Adani Green Energy by 6.96%, and Adani Total Gas by 5.57%. Adani Wilmar saw a 3.88% decline, while NDTV, a media company recently acquired by the group, experienced an 11% drop.
Despite these significant losses, the broader Indian stock market showed only modest declines. The Sensex fell by 375.79 points, or 0.47%, and the Nifty 50 index dipped by 47.45 points, or 0.19%, at the opening on Monday, suggesting that the impact of these allegations was somewhat limited.
Hindenburg’s New Claims: More Trouble for Adani?
Hindenburg Research, known for its hard-hitting reports, released new allegations over the weekend, claiming that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had stakes in offshore entities involved in a money siphoning operation connected to the Adani Group. These claims are based on what Hindenburg described as “whistleblower documents.”
These fresh allegations come at a time when the Adani Group is already under scrutiny following previous reports from Hindenburg, adding more fuel to an already blazing fire surrounding the group’s financial practices.
Adani Group’s Strong Rebuttal :
In response to these serious accusations, the Adani Group issued a forceful denial. The conglomerate dismissed the allegations as “malicious, mischievous, and manipulative,” and reiterated its dedication to transparency and compliance with all legal and regulatory requirements. The group emphasized that its overseas holding structures are fully transparent, with all necessary details regularly disclosed in public documents.
The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated, deliberate effort to malign our standing,” the company stated, underscoring its belief that these allegations are merely a distraction created by a discredited short-seller.
Market Experts Weigh In :
Despite the dramatic headlines, market experts believe that these new allegations may not have a lasting impact on the broader market. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggested that the Hindenburg report might not significantly affect the market in the long run. He noted that the “buy on dips” strategy, which has been successful in the current bull market, is likely to remain effective.
SEBI Defends Its Chairperson:
As the allegations spread, SEBI quickly moved to defend its Chairperson. The public was given the assurance by the regulatory body that it has strong internal controls in place to handle conflicts of interest, including strict disclosure guidelines and clauses allowing for recusal when needed.
Madhabi Puri Buch and her husband released a joint statement clarifying that their investment in the fund mentioned by Hindenburg was made back in 2015 when they were both private citizens living in Singapore. This was nearly two years before Madhabi Puri Buch joined SEBI as a Whole Time Member in 2017 and well before her appointment as Chairperson in March 2022.
The couple also highlighted SEBI’s rigorous disclosure and recusal norms, stating that these have been diligently followed, with all relevant securities holdings and transfers fully disclosed.
What’s Next for the Adani Group and SEBI? :
The latest allegations from Hindenburg Research have certainly put the Adani Group under renewed pressure, leading to significant drops in the group’s stock prices.
However, the broader market has remained stable, so analysts believe these allegations will have minimal long-term impact.
As the Adani Group continues to refute the claims and SEBI stands by its Chairperson, the unfolding drama between Hindenburg and the Adani Group is likely to continue to draw attention in the coming weeks.
FAQs :
1. What are the new allegations made by Hindenburg Research?
Hindenburg Research alleges that SEBI Chairperson Madhabi Puri Buch and her husband had stakes in offshore entities connected to a money siphoning scheme involving the Adani Group.
2. How did the Adani Group’s shares react to these allegations?
The shares of Adani Group companies dropped significantly, with Adani Enterprises falling by 3.09% and Adani Energy Solutions opening 17% lower on the BSE.
3. How has the Adani Group responded to these allegations?
The Adani Group strongly denied the allegations, labeling them as “malicious, mischievous, and manipulative,” and reaffirmed its commitment to transparency and regulatory compliance.
4. Did the broader Indian stock market react to the allegations?
While Adani Group stocks took a hit, the broader Indian market indices showed only minor declines, suggesting that the overall market impact was limited.
5. What mechanisms does SEBI have in place to prevent conflicts of interest?
SEBI has robust internal mechanisms, including disclosure requirements and recusal provisions, to manage potential conflicts of interest among its officers.
And also read our latest blog : Hindenburg Research Teases New Investigation in India: Speculation Grows Over Next Major Target After Adani Group
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