India’s market regulator, the Securities and Exchange Board of India (Sebi) has junked allegations of regulatory violations by Adani Group in their dealings with Adicorp Enterprises Pvt Ltd, Milestone Tradelinks and Rehvar Infrastructure, ruling that the transactions under scrutiny did not violate securities laws in force at the time.

In separate final orders issued on Thursday, Sebi’s wholetime member Kamlesh C. Varshney dismissed allegations of related party transaction violations and fraudulent practices involving Adani Ports and Special Economic Zone Ltd (APSEZ), Adani Power Ltd, Adani Enterprises Ltd, and little-known entities Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure.

The market regulator had initiated a probe after US short seller Hindenburg Research’s January 2023 report accused the conglomerate of using obscure intermediaries to route funds within the group, bypassing disclosure requirements. Sebi’s investigation covered the period from financial year 2012-13 to 2020-21 in the Adicorp case and from FY19 to FY23 in the Milestone–Rehvar matter.

In both cases, Sebi concluded that loans and transfers involving Adani firms and the private entities were genuine commercial transactions. “A plain reading of the Listing Agreement and LODR Regulations reveals that transactions between a listed company and an unrelated party are not covered within the definition of related party transactions as it existed at that time,” the orders stated.

“There is no violation of the provisions of the LODR Regulations as the impugned transactions do not qualify as related party transactions,” the regulator said.

The regulator stressed that the definition of related party transactions was broadened only through a 2021 amendment to the LODR Regulations, effective April 2022, which could not be applied retrospectively. This interpretation, Sebi noted, was backed by past precedents, an expert committee appointed by the Supreme Court, and the court’s own rulings.

The twin rulings represent a big relief for the Adani Group, which has battled investor concerns and market volatility since Hindenburg’s allegations.

“After an exhaustive investigation, SEBI has reaffirmed what we have always maintained, that the Hindenburg claims were baseless. Transparency and integrity have always defined the Adani Group,” Adani Group chairman Gautam Adani said in a post on social media platform X.

“We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report. Those who spread false narratives owe the nation an apology,” Adani said.