The Bombay high court on march 17 cleared Adani Group chairman Gautam Adani and managing director Rajesh Adani in a ₹388 crore case linked to the 1999 Ketan Parekh stock market scandal, which was under investigation by the Serious Fraud Investigation Office (SFIO).
The single-judge bench of Justice R.N. Laddha set aside the 2019 sessions court ruling that had overturned an earlier discharge order. The court found that the complaint failed to establish Adani Enterprises' direct involvement in the alleged stock price manipulation, citing a lack of public complaints.
SFIO lacks jurisdiction: It also ruled that the SFIO lacked jurisdiction to investigate the matter. The court rejected the SFIO’s plea to pause its order for two weeks, which would have allowed the investigative agency time to appeal to the Supreme Court.
Market manipulation: The case stemmed from a government-ordered probe in 2008 into Triumph Securities Ltd and ten other entities suspected of market manipulation and fraud. The SFIO filed a chargesheet in 2012, naming Adani Enterprises Ltd (formerly Adani Exports Ltd) and 12 individuals, including Gautam Adani and Rajesh Adani, under Sections 420 and 120B of the IPC, related to cheating and criminal conspiracy.
According to the complaint, Ketan Parekh’s entities allegedly gained ₹151.40 crore through transactions involving Adani scrips, while Adani Group’s promoters were accused of making ₹388.11 crore in unlawful gains, leading to a combined ₹540 crore loss for investors.
The Adani Group consistently denied the allegations, arguing that the 2012 investigation order authorised a probe into specific companies but not Adani entities. The company maintained that the SFIO exceeded its authority, as there were no violations of the Companies Act, 1956.
Procedural lapses: The Adanis also highlighted procedural lapses, pointing out that SFIO did not forward its findings to Securities and Exchange Board of India (Sebi) or the police, as required. Instead, it wrongly initiated prosecution despite the absence of public grievances against Adani Enterprises.
A magistrate court discharged the Adanis in 2014, but the SFIO challenged the ruling in 2015 through a criminal revision plea in the sessions court. In 2019, the sessions court reinstated the charges, prompting the Adanis to approach the Bombay high court. The sessions court later granted a temporary stay, which was extended by the high court.
On Monday, the high court struck down the sessions court ruling, clearing Adani and others.
(By arrangement with livemint.com)
