Adani News

Tag: SEBI

  • Adani-Hindenburg row: SC grants 3-months extension to SEBI for probe

    Adani-Hindenburg row: SC grants 3-months extension to SEBI for probe

    NEW DELHI: The Supreme Court on Wednesday granted an extension of time for three months to the Securities and Exchange Board of India (SEBI) to conduct a probe into the Hindenburg report against Adani Group.

    A bench led by the Chief Justice of India (CJI) DY Chandrachud and also comprising Justices PS Narsimha and JB Pardiwala granted an extension of time for three months to SEBI.

    The court said that SEBI is granted time till 14th August 2023 to conduct the probe. The court also said that the matter will be listed in July and requested the expert committee to continue to assist the court. The court also said that the expert committee may hold further deliberations in the meantime. The court also said that copies of the report of the expert committee shall be made available to the parties and their counsels to assist the court.

    Solicitor General Tushar Mehta has informed SC, SEBI is seeking an extension of time for conducting the probe and needs six months to reach any conclusion. In a rejoinder filed recently, The Securities and Exchange Board of India apprised the Supreme Court on Monday that the market regulator is already investigating Adani Group companies since 2016 is factually baseless.

    SEBI has filed a rejoinder affidavit in response to a petition relating to Hindenburg Research’s report on Adani Group. SEBI had sought an extension to conclude the investigation in the report by US short-seller Hindenburg Research by a period of six months.

    The top court on Friday orally remarked that they will extend the time for the probe to SEBI, but not for six months and they can extend the time for the probe by three months. SEBI told the SC that the investigation done earlier by SEBI pertains to the issuance of Global Depository Receipts (“GDRs”) by 51 Indian listed companies, in respect of which investigation was conducted.

    SEBI submitted before the Supreme Court that no listed company of Adani Group was part of those 51 companies it was investigating. “Pursuant to the completion of the investigation, appropriate enforcement actions were taken in this matter. Hence, the allegation that the Securities and Exchange Board of India (“SEBI”) is investigating Adani since 2016 is factually baseless. I, therefore, say and submit that reliance sought to be placed on the investigation pertaining to GDRs is wholly misplaced,” SEBI said in a rejoinder affidavit.

    SEBI submitted before Supreme Court that in the context of the investigation into Minimum Public Shareholding (“MPS”) norms, SEBI has already approached eleven overseas Regulators under the Multilateral Memorandum of Understanding (“MOU”) with the International Organization of Securities Commissions (“IOSCO”). Various requests for information were made to these Regulators. The first request to overseas Regulators was made as early as on October 6, 2020, SEBI apprised the court.

    SEBI submitted before the Supreme Court that the application for extension of time filed by SEBI is meant to ensure carriage of justice keeping in mind the interest of investors and the securities market since any incorrect or premature conclusion of the case arrived at without full facts material on record would not serve the ends of justice and hence would be legally untenable.

    SEBI has informed Supreme Court that in respect of the investigation and examination relating to 12 transactions referred to in the Hindenburg Report, prima facie it is noted that these transactions are highly complex and have many sub-transactions across numerous jurisdictions and a rigorous investigation of these transactions would require collation of data/information from various sources including bank statements from multiple domestic as well as international banks, financial statements of onshore and offshore entities involved in the transactions and contracts and agreements, if any, entered between the entities along with other supporting documents.

    On March 2, the apex court directed the capital market regulator SEBI to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report, which led to a massive wipeout of more than USD140 billion of the Adani Group’s market value. Supreme Court, on March 2, set up an expert committee on the issue arising from the Hindenburg Research report on Adani Group companies.

    The committee will consist of six members, headed by former apex court judge Justice AM Sapre. The top court had then asked SEBI to file a status report within two months. The apex court was then hearing petitions pertaining to the Hindenburg report, including the constitution of a committee relating to regulatory mechanisms to protect investors’ interests.

    The January 24 Hindenburg report alleged stock manipulation and fraud by the conglomerate. The Adani Group has attacked Hindenburg as “an unethical short seller”, stating that the report by the New York-based entity was “nothing but a lie”. A short-seller in the securities market books gains from the subsequent reduction in the prices of shares.

  • SC willing to grant 3 more months to SEBI for probing Adani-Hindenburg issue

    SC willing to grant 3 more months to SEBI for probing Adani-Hindenburg issue

    The Supreme Court on Friday asked the Securities and Exchange Board of India to show some “alacrity” in completing its probe within three months into the controversy surrounding the Hindenburg Research report on the Adani Group of companies.

    The court said it may grant additional time of three months instead of six months for the purpose.

    The group was accused of “accounting fraud” and “brazen stock manipulation” as per January 25 report by the US short seller firm Hindenburg.

    Taking up the SEBI’s plea, a bench of Chief Justice of India  D Y Chandrachud and Justices P S Narasimha and J B Pardiwala showed its disinclination to accept a contention by Solicitor General Tushar Mehta that the plea for six more months was a compressed time, looking into very scope and expanse of the probe.

    “You complete your investigation in three months and come back to us, because there has to be some alacrity. We cannot say that you need a minimum six months,” the bench told Mehta, representing SEBI.

    The court scheduled the matter for Monday for passing the order on SEBI’s application for more time.

    The bench also said it has received report of the Justice Abhay Manohar Sapre committee appointed by it. 

    The court said the report filed in sealed cover would also be dealt with on Monday as the bench could not read it due to paucity of time.

    During the hearing, the bench indicated to Mehta it will give SEBI further time of  three months’ only and fix the matter for consideration on August 14.

    Advocate Prashant Bhushan, appearing for the petitioners, opposed the SEBI’s plea for six months additional time.

    He said that they should have disclosed to the court the information on the investigation conducted so far. 

    “What investigations have been done so far on this matter, because the Hindenburg was not making these allegations for the first time,” he said.

    The bench, however, did not agree.

    “Suppose they were to tell us what they have learnt so far in the investigation then to ask them to disclose this would be affect their probe. It is not a criminal investigation that we are looking at the case diary. It would not be proper at this stage,” the bench said.

    Mehta, for his part, insisted, “I have taken instruction from the highest administrative level. Six months are also a compressed period and I am saying it with a degree of sincerity. I will not be promising something, which we also know is something not achievable”.

    On April 29, the SEBI moved the court seeking six-months extension to complete its probe into Hindenburg allegations of “stock manipulation” by the Adani group.

    In its application, the market regulator said, “For ascertaining possible violations related to mis-representation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions…..given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months”.

    It submitted that in order to conduct a proper investigation and arrive at verified findings, it would be just, expedient and in the interest of justice that the apex court extends time to conclude the investigations by at least 6 months.

    In an order passed on March 2, the top court had set a deadline to submit a status report on May 2, while asking Sebi to expeditiously conclude the investigation and file a status report.

    The court had set up the committee headed by the top court’s retired judge Justice Sapre to investigate if there has been regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies.

    It had directed the SEBI to look into whether there has been a failure to disclose transactions with related parties and other relevant information and whether there was any manipulation of stock prices in contravention of existing laws.