India’s top court orders investigation into Adani fraud claims that cost Asia’s richest man billions

‘Truth will prevail,’ says Gautam Adani

File photo: India’s opposition has been staging protests to demand investigation into Adani fraud claims (AP)

The fraud claims and regulatory failures that the embattled Adani Group has been accused of will be investigated by an independent panel, India’s top court has ruled.

New York-based short seller Hindenburg Research had accused the Adani Group firms of stock manipulation and financial fraud in a report in January, sending its shares into a sharp fall. The group’s seven companies lost more than $100bn in market value after the accusations.

Adani Enterprises cancelled a share offering meant to raise $2.5bn last month after Hindenburg issued its report and its share price plummeted.

Gautam Adani, who heads the Adani conglomerate, briefly surpassed Jeff Bezos to become the world’s second-richest person last year, but has dropped several places down on the Forbes list of billionaires since the allegations emerged.

India’s Supreme Court on Thursday directed an expert committee comprising five members to probe any regulatory failures and suggest measures to improve regulatory oversight and protections for investors. A committee has also been asked to submit its findings to the Supreme Court within two months.

The court was acting on petitions filed by some activists and lawyers.

It instructed the federal government-run Securities and Exchange Board of India (Sebi) to investigate whether there had been any violation of rules or manipulation of stock prices by the Adani Group.

Reacting to the verdict, Mr Adani tweeted that his companies welcomed the court’s decision and believed that it would “bring finality in a time-bound manner”.

“Truth will prevail,” he said.

His conglomerate has denied Hindenburg’s allegations and called them an “attack against India” in a 413-page rebuttal.

The incident has led to a political row.

Opposition lawmakers blocked parliamentary proceedings last month demanding a probe into Mr Adani’s business deals.

The businessman’s meteoric rise in the last decade has often been attributed to his apparent close ties with prime minister Narendra Modi.

The billionaire tycoon and prime minister both share the same home state, Gujarat. But Mr Adani has refuted criticism that he benefits from Mr Modi’s rule.