The Supreme Court had ordered SEBI to “expeditiously conclude” its investigation within two months and file a status report by May 2
- Updated Apr 29, 2023, 9:46 PM IST
The Securities and Exchange Board of India (SEBI) is asking for a six-month extension plea before the Supreme Court to complete its investigation into the allegations made against the Adani Group by Hindenburg Research.
“In respect of the investigation relating to 12 suspicious transactions, prima facie it is noted that these transactions 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 a statement.
The statement further added, “It is pertinent to note that in the SEBI application filed before the Hon’ble Supreme Court, there are no conclusions of any alleged wrong-doing. The SEBI application only cites the allegations made in the short-sellers report, which are still under investigation.”
Meanwhile, the Adani group has pledged their full cooperation in the investigation. “We have welcomed the investigation, which represents a fair opportunity for everyone to be heard and for all issues to be addressed. We are fully compliant with all laws, rules and regulations and are confident that truth will prevail. We are fully cooperating with SEBI and will continue to provide all our support and cooperation,” Adani Group spokesperson said.
Seven listed Adani companies along with subsidiaries are under the scanner and have been asked to submit the documents and info including Adani Enterprises Limited, Adani Power Limited, Adani Transmission Limited, Adani Green Energy Limited, Adani Ports and Special Economic Zone Limited, Adani Total Gas Limited and Adani Wilmar Limited.
“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,” SEBI added.
SEBI has listed the following possible violations that might need more time to finish the probe:
1. Possible violations related to Related Party Transactions (RPT) Disclosures
2. Possible violations of Corporate Governance related matters
3. Possible violation of Minimum Public Shareholding (MPS) norms
4. Possible share price manipulations
5. Possible violations of FPI Regulations
6. Possible violations of ODI Norms
7. Possible violations of Insider Trading Regulations/FUTP Regulations
8. Possible violations of norms of short selling
Additionally, the deposition of key managerial persons may be required before the conclusion of the investigation.
The Supreme Court ordered SEBI to “expeditiously conclude” its investigation within two months and file a status report by May 2. In the same order, the court had also constituted a six-member expert panel to investigate regulatory failures and recommend measures to enhance investor awareness. The expert panel was directed to submit its report in a sealed cover to the court within two months.
The court set up the expert committee on March 2, amid controversy arising from a report by US-based short-seller Hindenburg Research, which accused the Adani Group of using a network of companies in tax havens to inflate revenue and stock prices while piling up debt. The Adani Group has consistently denied these allegations.
SEBI was directed by the Supreme Court to investigate whether there was any violation of Section 19 of SEBI rules and any manipulation of stock prices by the Adani Group.
Published on: Apr 29, 2023, 4:49 PM IST