Gautam Adani, brother Rajesh get court relief in Rs 388 cr cheating case

The Bombay High Court on Monday discharged Gautam Adani, chairman of Adani Enterprises Limited (AEL), and managing director Rajesh Adani from a Serious Fraud Investigation Office (SFIO) case concerning alleged manipulation of AEL’s share prices, reported Bar and Bench.

Justice Rajesh N Laddha quashed a sessions court’s order that had refused to clear the Adanis and AEL from the long-standing case, which accused them of market regulation violations amounting to Rs 388 crore.

The high court's ruling came after the Adanis and AEL challenged the sessions court's decision. Their appeals were argued by senior advocates Amit Desai and Vikram Nankani, who maintained that there was no basis to continue proceedings against them.

The case traces back to a 2012 chargesheet filed by the SFIO, alleging that AEL and the Adanis had manipulated share prices in collaboration with stockbroker Ketan Parekh, a key figure in India's largest stock market scandal of 1999-2000.

In 2014, a magistrate court had discharged AEL and the Adanis. However, this was overturned in November 2019 by a sessions court in Mumbai, which, on a revision plea, ruled that the SFIO’s investigation “prima facie” showed unlawful gains of Rs 388.11 crore by Adani Group promoters and Rs 151.40 crore by Ketan Parekh through alleged manipulation of AEL shares.

Sessions judge D E Kothalikar had then held that there was sufficient ground to proceed against the Adanis. Following this, the high court stayed the sessions court order in December 2019, and the stay was extended repeatedly until the final verdict on Monday.

In February 2023, the high court questioned the SFIO—an agency under the Union Ministry of Corporate Affairs—about its delay in pursuing the case, noting there had been no hearing since February 10, 2022, when the interim stay was extended. The court asked whether the lack of action was due to the “scenario outside”.

At that time, the Adani Group was under public scrutiny after US-based firm Hindenburg Research released a report accusing the conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades”.