Market regulator SEBI on Friday informed the Supreme Court that it will not be seeking an extension to complete its probe in the Adani-Hindenburg matter.
A Supreme Court-appointed expert committee had in an interim report in May stated that it saw “no evident pattern of manipulation” in billionaire Gautam Adani’s companies and there was no regulatory failure.
It, however, cited several amendments the SEBI made between 2014 and 2019 that constrained the regulator’s ability to investigate, and its probe into alleged violations money flows from offshore entities has “drawn a blank”.
Chief Justice of India DY Chandrachud on Friday asked the SEBI, represented by Solicitor General Tushar Mehta what it has been doing on investor value and if it is ensuring their protection.
“There is extreme volatility in the stock market. What is the SEBI planning to do for this kind of volatility for the investors,” SEBI was asked. On this, Mehta said action has been taken against short-sellers on instances found.
“There is no objection to the recommendations of the expert committee for strengthening the regulatory mechanism and the recommendations are under considerations and in principle we have accepted the recommendation,” Mehta said.
Adani has been embroiled in controversy since January 2023 when Hindenburg Research alleged corporate misgovernance, among other charges, which the conglomerate has vehemently denied. Following the release of this report, stocks linked to the company saw massive losses on Dalal Street, which prompted the attention of the apex court. The SC eventually set up a panel to assist the market regulator in investigating certain issues.
Following this, the SEBI filed a status report before the SC and said that out of 24 investigations arising out of the Hindenburg report, 22 are final in nature and 2 are interim in nature. SEBI informed the SC that it was awaiting information from tax havens on the interim investigations on actual owners behind foreign investors investing in the conglomerate.
The probe reports finalised include allegations of manipulation of stock prices, alleged failure to disclose transactions with related parties and possible violation of insider trading in some of the group stocks.
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.
