Adani-Hindenburg row: The Supreme Court heard a batch of Public Interest Litigations (PILs) seeking an investigation into the Adani Group-Hindenberg report issue and granted SEBI time till August 14, 2023, submit its probe report.
Hearing the matter the Chief Justice of India (CJI) Dr DY Chadrachud said that the expert committee has submitted a report bearing in mind the timeline of 2 months stipulated in the order of this court. He further said the proceedings shall be listed after summer recess in order to enable the court and counsel to analyse the report of the committee.
"The expert committee is requested to assist the court and the committee to hold further deliberations and take up any further aspect or suggestion for the proceedings. copies of the report of expert committee shall be made available to the parties and their counsels in order for them to take action. SEBI is being granted extension of time till August 14, 2023," the CJI added.
Earlier on Monday, May 15, the top court adjourned the hearing on the SEBI plea seeking a six-month extension to conclude the investigation in the Hindenburg Research's report. The matter was adjourned was a three-member bench headed by the CJI.
Earlier, Solicitor General Tushar Mehta informed the apex court that SEBI is seeking an extension of time for conducting the probe and needs six months to reach any conclusion. SEBI told the top court 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 also contended 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 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," the rejoinder affidavit read.
What SEBI contended in court?
SEBI submitted before the apex court that in the context of an 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, the SEBI apprised the court.
Further, SEBI also stated that the application for extension of time filed by it 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.
SC directed SEBI to probe securities law violations by Adani Group
On March 2, the apex court directed the capital market regulator SEBI to investigate any securities law violations by the Adani Group in the wake of the Hindenburg report, which led to a massive wipeout of more than USD 140 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 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.
(With ANI inputs)
