Short seller Hindenburg’s research in January levelled allegations of market manipulations on Adani Group. Ever since, while the business conglomerate’s concerns initially plunged and then gained moderate stability with restricted investments, the country’s political scenario has been rocked with the Opposition demanding a fair JPC into the matter. The ruling BJP has not entertained the demand for a discussion in the House and remain non-committal to a Joint Parliamentary Committee investigation.
In wake of the political storm and the subsequent judicial inquiry, the Supreme Court, had on March 2 asked Securities and Exchange Board of India (SEBI) to conclude within two months its probe into by US short-seller Hindenburg Research against Adani Group.
With its deadline ending May 2, SEBI on April 29, made an application seeking extension. Welcoming the same on grounds of ensuring that the trial is impartial and thorough, the business house also stated: “It is pertinent to note that in the SEBI application filed before the Hon’ble Supreme Court, there are no conclusions of any alleged wrongdoing.” Adani Group said in a statement.
The conglomerate has repeatedly denied all the allegations. SEBI in its application filed on Saturday stated that it needs six months to “arrive at conclusive finding” in case of those where “prima facie violations have been found” and “to revalidate the analysis and arrive at conclusive finding” where “prima facie violations have not been found.” Investigation/examination relating to 12 suspicious transactions, reveals that these “are complex and have many sub-transactions and a rigorous investigation of these transactions would require collation of data/information from various sources along with detailed analysis including verification of submissions made by the companies,” SEBI said in the application.
Hindenburg in January accused Adani Group of accounting fraud and using a web of companies in tax havens to inflate revenue and stock prices, even as debt piled up.
However, Opposition leaders took to their social handles to slam SEBI, TMC MP Mohua Moitra wrote: “This is a joke. @SEBI_India has been investigating since October 2021 when they replied to my letter of July. While they prima facie see violations (no surprise)-they want 6 months to protect their favorite businessman so that he can get maximum time to cover up.”
Alongside, Priyanka Chaturvedi of Shiv Sena UBT hoped the SC would ensure that the SEBI investigation does not come in a sealed cover. “The public deserves to know the truth, hopefully CJI (chief justice of India) will truly end the sealed cover-based judgements for the sake of transparency.” She also linked the possibility of an extension with ” buying more time – maybe till General Elections?”
General elections are due in May next year.
In its application to the Supreme Court, SEBI informed of “two sets of categories for the probe.” The first covers allegations made in the Hindenburg report and includes “12 suspicious transactions for possible violations related to mis-representation of financials, circumvention of Regulations and/or fraudulent nature of transactions.”
The second category relates to trading in Adani Group stocks in the periods pre and post Hindenburg Report. The probe in this category includes possible violations of FPI regulations, ODI norms, insider trading regulations and norms of short selling.
“SEBI has submitted a detailed status report and the prima facie findings to the Committee in compliance with the order passed by this Hon’ble Court,” the application said adding possible violations related to RPT, corporate governance, MPS, price manipulations and ODI norms require further time for conclusion.
The Apex court, while directing the setting up of a six-member committee headed by former judge, Justice A.M, for the assessment of the extant regulatory framework and for making recommendations to strengthen the process, had said that it was appropriate to set up such a panel of experts in order to protect Indian investors against the volatility of the kind which has been witnessed in the recent past.
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