SEBI told SC, claim baseless, no investigation against Adani since 2016

SEBI reiterated its request for an additional six months to conclude its probe in the Adani-Hindenburg incident to “ensure justice”, rejecting claims that some Adani group companies were being probed for possible law violations since 2016. can be ensured.

However, Sebi’s statement on Monday contradicts comments made by junior finance minister Pankaj Chowdhary in July 2021 when he told Parliament that Sebi was probing some Adani group companies for non-compliance . The Finance Ministry, however, said the government stood by its written response in the Lok Sabha, which was based on due diligence and inputs from all relevant agencies.

Chief Justice Dhananjay Y. A bench headed by Chandrachud could not hear SEBI’s plea on Monday due to paucity of time and adjourned the regulator’s plea to July 10, thus automatically giving SEBI an additional two months.

Meanwhile, filing an additional affidavit on Monday, SEBI rejected last week’s submission made by advocate Prashant Bhushan on behalf of one of the public interest litigation (PIL) petitioners that there is no case for the six-month deadline The regulator was already looking into similar complaints against the group since 2016.

SEBI said the 2016 probe has nothing to do with the Hindenburg Report, but only GDRs by 51 Indian listed companies. “However, none of the listed Adani Group companies were part of the above 51 companies. After completion of investigation, appropriate enforcement action was taken in the matter. Therefore, the allegation that SEBI is probing Adani since 2016 is factually baseless,” the regulator’s affidavit said.

The regulator said the 12 transactions referred to as suspicious in the Hindenburg report are highly complex, and have multiple sub-transactions in multiple jurisdictions.

“A rigorous investigation of these transactions would require collation of data/information from various sources, including bank statements of several domestic as well as international banks, transactions and financial records of onshore and offshore entities involved in the contracts and agreements. particulars involved, if any, of the institutions. Thereafter, analysis has to be made on the documents received from various sources before arriving at conclusive conclusions.” SEBI said.

Regarding its examination of the minimum public shareholding norms, the affidavit said the regulator has already approached 11 foreign regulators under the multilateral MoU with the International Organization of Securities Commissions (IOSCO) and for foreign regulators. The first request was made as soon as possible. In October 2020.

“The application for extension of time filed by SEBI is meant to ensure justice keeping in view the interest of the investors and the securities market as without material of complete facts on record any erroneous or premature conclusion of the matter shall not result. of justice and hence would be legally untenable,” it asserted.

On May 13, the Supreme Court offered an additional three months to SEBI while expressing reservations about the regulator’s request for a six-month deadline. The court, however, said it would review the Justice Sapre committee report on regulatory failure and violations of laws before taking a decision on SEBI’s extension.

SEBI told the bench during the proceedings on Friday that it is yet to form a final opinion on the “suspicious” nature of the transactions and alleged violation of laws by the Adani group, as pointed out in a critical report by US short-seller Is. Hindenburg Research wiped out more than $140 billion in the group’s market value in January.

That day, advocate Bhushan, appearing for PIL petitioner Anamika Jaiswal, opposed SEBI’s request, claiming that the regulator was looking into similar complaints against the Adani group since 2016.

The six-member panel, headed by former Supreme Court judge AM Sapre, was constituted by the court’s March 2 order to probe allegations of regulatory failure and violation of laws against the Adani group and strengthen the statutory and supervisory regime. Had to give suggestions for.

At the time, the Adani Group in a statement welcomed the inquiry, “which represents a fair opportunity for everyone to be heard and all issues addressed”.

The Hindenburg Report, released on January 24, claimed “brazen accounting fraud” and “stock manipulation” by the Gautam Adani-led group. Although the group dismissed the report as “maliciously mischievous”, it triggered a massive slide in Adani Group shares, which lost more than $140 billion in days and forced the cancellation of a deal. 20,000 crore share sale in the flagship of the group.

The Adani Group, however, denied the allegations of stock market manipulation and accounting fraud by Hindenburg.