
Adani Group’s stocks fell after Hindenburg Research accused India’s chief market regulator of having conflicts of interest that prevented a thorough probe into fraud allegations against the conglomerate.
Shares of Adani Enterprises Ltd., the group’s flagship, slid as much as 5.5% in early trading on Monday. Adani Energy Solutions Ltd. plunged as much as 17% before paring the bulk of the loss, with all but one of the conglomerate’s 10 stocks trading lower.
The benchmark NSE Nifty 50 Index recouped initial losses to trade higher in line with other Asian markets.
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 wrongdoing.
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“Short-term volatility is inevitable as investors grapple with the veracity of these claims,” said Sonam Srivastava, founder and fund Manager at Wright Research.
“If substantiated, the allegations could erode investor trust, deter foreign capital, and necessitate stringent regulatory overhauls.”
The investments by the couple were made in 2015, two years before Buch joined Sebi, Hindenburg said, citing whistleblower information and other unverified documents, according to Bloomberg.
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 has escalated weeks after the US firm was queried by the Indian regulator about its report against Adani in early 2023, which erased more than $150 billion in combined market value at one point.
The revelation also led India’s top court to order a Sebi probe on possible violations and any suspicious trading activity. Sebi has yet to make a case against the Adani Group.