Seeking six more months to complete the probe into allegations against Adani Group, the conglomerate run by billionaire Gautam Adani, capital markets regulator Sebi has concluded no wrongdoing in its application to the country’s top court.
The Supreme Court had on March 2 asked the Securities and Exchange Board of India (Sebi) to complete within two months its probe into the allegations made by US short-seller Hindenburg Research against the Adani group.
SEBI was supposed to file a status report on May 2, but on Saturday it applied for an extension.
Hindenburg in January accused the Adani Group of accounting fraud and using a web of companies in tax havens to inflate revenue and stock prices, even as the debt piled up. The group has repeatedly denied all allegations.
Sebi, in its application filed on Saturday, said it needs six months to “arrive at conclusive finding” in cases where “prima facie violations have been found” and “to re-verify the analysis and arrive at conclusive finding”. for” where “prima facie violation” is not found.
Investigation/examination relating to 12 suspicious transactions reveals that these are “complex and consists of multiple sub-transactions and a rigorous examination of these transactions requires detailed analysis including verification of submissions made by the companies as well as various Reconciliation of data/information from sources would be required,” SEBI said in the application.
“It is pertinent to note that there is no finding of any alleged wrongdoing in the application of SEBI filed before the Hon’ble Supreme Court,” Adani Group said in a statement.
“SEBI’s application only cites the allegations made in the short-seller’s report, which are still under investigation.” The delay in the SEBI probe was viewed with suspicion in some circles.
“This is a joke. @SEBI_India is probing since October 2021 when they replied to my letter of July. While they see prima facie violations (no surprise) – they want 6 months to protect their favorite businessman So that they get maximum time to cover up,” tweeted TMC MP Mahua Moitra.
Priyanka Chaturvedi of Shiv Sena UBT hoped that the Supreme Court would ensure that the SEBI probe does not come in a sealed cover.
“Public deserves to know the truth, hope the CJI (Chief Justice of India) truly puts an end to sealed cover based decisions for transparency.”
Citing a news report of SEBI red flagging “12 suspicious transactions and possible stock price manipulation” and “possible case of insider trading,” she said, sought an extension of six months “and nothing else – probably till the general elections”. ?”
“Investigation is already going on by SEBI in some cases of Adani group in 2021 and before, SC has ordered investigation but even those are not concluded till date.” General elections are due in May next year.
Adani said in the statement that Sebi is probing the allegations made by a foreign short-seller and is also examining market movements before and after the release of its report on January 24.
“We understand that SEBI has approached the Hon’ble Supreme Court for more time to conclude its investigation,” it said.
“We welcome the investigation, which represents a fair opportunity for everyone to be heard and all issues addressed. We are fully compliant with all laws, rules and regulations and are confident that the truth will emerge We are fully cooperating with SEBI.” And will continue to extend our full support and cooperation.”
In its application to the Supreme Court, SEBI said it has fixed two sets of categories for scrutiny. The first includes the allegations made in the Hindenburg Report.
The charges included “12 suspicious transactions for potential violations of regulations related to misrepresentation of financial statements, fraud and/or the fraudulent nature of the transactions.”
It also included “potential violations relating to disclosure of Related Party Transactions (RPT), matters relating to corporate governance, minimum public shareholding (MPS) norms in terms of FPI shareholding and possible stock price manipulation in various Adani Group shares”. PTI saw, said.
The second category pertains to trading in Adani Group shares in the period before and after the Hindenburg Report. Investigations in this category cover possible violations of FPI rules, ODI norms, insider trading rules and short selling norms.
Enumerating possible violations relating to RPT, Corporate Governance, MPS, price rigging and ODI regulations, the application states, “SEBI submitted a detailed status report and prima facie findings to the Committee in compliance with the order passed by this Hon’ble Court”. Is.” More time is needed to draw conclusions.
SEBI submitted that with regard to investigation relating to 12 suspicious transactions, these are complex and have multiple sub-transactions.
It added that a thorough investigation of these transactions would require detailed analysis including verification of submissions made by the companies as well as collation of data from various sources.
The apex court had directed constitution of a six-member committee headed by former apex court judge Justice AM Sapre to assess the existing regulatory framework and make recommendations to strengthen the process, saying it was appropriate to constitute . Such a panel of experts to protect Indian investors from the kind of volatility seen in the recent past.
The Justice Sapre panel is to be assisted by the Center and other statutory agencies including the SEBI chairman.
The Center had agreed to the apex court’s proposal to set up a committee headed by a former Supreme Court judge to go into regulatory arrangements.
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