Adani-Hindenburg Row: SEBI moves SC seeking direction for six more months to complete probe

New Delhi: SEBI (Securities and Exchange Board of India) the market regulator, on Saturday moved the Supreme Court seeking a six-month extension to complete its probe into Hindenburg allegations of “brazen stock manipulation” and an “accounting fraud scheme” by the Adani group.

SEBI’s petition filed before the Supreme Court, sought a direction from it for an extension of six-month to complete its probe into Hindenburg allegations.

SEBI, also said that it needed more time, as the investigation is complex and requires additional time to ensure that all aspects of the allegations are thoroughly examined.

There are 12 suspicious transactions for possible violations related to misrepresentation of financials, and fraudulent nature of transactions, the SEBI said in its petition filed before the Supreme Court, which is expected to hear the Adani-Hindenburg issue on Mau first week.

SEBI’s plea to the Supreme Court said that its preliminary findings on several possible violations by the Adani Group, includes, misrepresentation of financials, fraudulent transactions, disclosure norms, corporate governance norms, minimum public shareholding norms, and stock price manipulation.

The SEBI has also said that it arrived at a prima facie view based on trading in Adani stocks before and after the Hindenburg report, including possible violations of foreign portfolio investment (FPI) norms, overseas direct investment (ODI) norms, insider trading regulations, and norms on short selling.

The SEBI, said that the deadline to submit the status report to the Supreme Court is May 2, the SC had said in its March 2 order, which also asked it (SEBI) to “expeditiously conclude” the investigation within two months and file a status report.

Supreme Court in its verdict on March 2, had said it was constituting a committe into the Adani-Hindenburg issue and it will be supervised by a SC-appointed 5-member panel, including O P Bhat, Justice JP Devdhar, K V Kamat, Nandan Nilekani and Somasekhar Sundaresan and the committe will be headed by Justice (Former) Abhay M Sapre., Reorg today attended the Court proceedings.

The Supreme Court also had said that the SEBI shall conclude the probe within 2 months and file a report and the committee shall submit its report in a sealed cover before this court within 2 months.

A three-judge bench of the Supreme Court, headed by the Chief Justice of India (CJI) Dr Dhananjaya Yeshwant Chadrachud and also comprising Justices P S Narasimha and J B Pardiwa, who had reserved its verdict on February 17 on constitution of a committee, pronounced the judgement on March 2.

The Supreme Court had heard a number of petitions filed by lawyer duo — Manohar Lal Sharma and Vishal Tiwari — Congress leader and Member of Parliament (MP) Dr Jaya Thakur, seeking a direction for investigation against Adani Group in the light of Hindenburg report.

“The decline on share price was precipitated by report by Hindenburg. The report alleges that the Adani group manipulated violated security laws,” the Apex Court noted in its judgement.

“As a part of SEBI probe, it shall also look into whether violation rule 19 of security contract regulation rules. whether there was any manipulation of stock prices,” the Supreme Court had said, in its verdict.

The Top Court also noted in its verdict that there was a need to review existing regulatory mechanism to protect indian investors from market volatility.


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