Adani-Hindenburg row: Not investigating Adani group since 2016 as claimed, SEBI to SC

08:23 PM May 15, 2023 | PTI |

New Delhi: The Securities and Exchange Board of India (SEBI) on Monday told the Supreme Court that it was not investigating the Adani group since 2016 and termed such claims “factually baseless”.


The earlier investigation pertained to the issuance of Global Depository Receipts (GDRs) by 51 Indian firms and no listed company of Adani group was among them, submitted the market regulator which is seeking an extension of six months to complete a probe into allegations of stock price manipulation by the Guatam Adani-led group.

On May 12, lawyer Prashant Bhushan had opposed the plea for the extension of time, saying SEBI was seized of some kind of investigation in the matter since 2016.

The fresh rejoinder affidavit by SEBI was filed by the market regulator before a bench headed by Chief Justice D Y Chandrachud which adjourned to Tuesday the hearing on PILs and a separate plea of the SEBI on the issue of extension of time.

The hearing on the market regulator’s plea and PILs could not take place on Monday due to paucity of time and on account of scheduled hearing of certain matters before a special bench at 3 pm.


The fresh affidavit said 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.

It said the ‘investigation’ referred to in its earlier reply affidavit has “no relation and/or connection to the issues referred to and/or arising out of the Hindenburg report…

”The matter referred to in paragraph 5 pertains to the issuance of Global Depository Receipts (GDRs) by 51 Indian listed companies in respect of which investigation was conducted. However, no listed company of the Adani group was part of the aforesaid 51 companies. Pursuant to the completion of the investigation, appropriate actions were taken in this matter.” It termed as “factually baseless” the allegation that the SEBI has been investigating the Adani group since 2016 and said, “I, therefore, say and submit that reliance sought to be placed on the investigation pertaining to GDRs is wholly misplaced.” The SEBI, in its affidavit, said it has already approached eleven overseas regulators under the Multilateral Memorandum of Understanding (MMOU) with the International Organisation of Securities Commissions (IOSCO) with respect to its investigation into Minimum Public Shareholding (MPS) norms and the first such plea was made as early as October 6, 2020.

“Various requests for information were made to these regulators. The first request to overseas regulators was made as early as October 6, 2020. A detailed note has been submitted to the expert committee constituted by this court covering the steps taken, responses received and the current status of information gathering under the MMOU of IOSCO,” it said.

The affidavit said in respect of the investigation 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.

A rigorous investigation of these transactions would require the collation of data or information from various sources including bank statements from multiple domestic as well as international banks, and financial statements of onshore and offshore entities involved in the transactions and contracts, it said.

“Thereafter, analysis would have to be conducted on the documents received from various sources before conclusive findings can be arrived at,” it said.

The bench, which also comprised justices P S Narasimha and J B Pardiwala, had on May 12 said it would consider granting three more months to SEBI for concluding its probe into the allegations of stock price manipulation and lapses in regulatory disclosure.

The apex court had on March 2 asked SEBI to probe within two months the allegations against the Adani group and also set up a panel to look at providing protection to Indian investors after a damning report by US short-seller Hindenburg wiped out more than USD 140 billion of the Indian conglomerate’s market value.

It had also ordered the setting up of a six-member committee headed by former apex court judge Justice A M Sapre to investigate the issue.

The ambit of the Sapre panel is to provide an overall assessment of the situation, including the relevant causal factors which have led to volatility in the securities market in the recent past.

The panel was asked to suggest measures to ”(i) strengthen the statutory and/or regulatory framework; and (ii) secure compliance with the existing framework for the protection of investors”, the court said.

Till now, four PILs have been filed in the top court on the issue, including by lawyers M L Sharma and Vishal Tiwari and Congress leader Jaya Thakur.

Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.

The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.


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