'Factually baseless': Sebi to SC on probing Adani firms since 2016

Stand by reply that stated Sebi was probing some Adani group firms: FinMin

Samie Modak Mumbai

Photo: Bloomberg

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The Securities and Exchange Board of India (Sebi) on Monday informed the Supreme Court (SC) that it has not been investigating any Adani Group listed firm since 2016 as alleged by some petitioners, who have sought probe into the claims made by US-based short seller Hindenburg Research.
The SC Bench, comprising Chief Justice of India D Y Chandrachud and Justices P S Narasimha and J B Pardiwala, adjourned the matter due to paucity of time. One of the counsels said the next hearing was scheduled for July 10.

The securities market regulator further informed the apex court that the connection drawn by the petitioners in their reply affidavit has no bearing on the issues referenced in the Hindenburg report.
“I further say and submit that the matter referred to in Paragraph 5 pertains to the issuance of global depositary receipts by 51 Indian listed companies, in respect of which investigation was conducted. However, no listed company of Adani Group was part of the aforesaid 51 companies... Hence, the allegation that Sebi has been investigating Adani since 2016 is factually baseless,” Sebi said in a rejoinder affidavit.

The regulator’s latest affidavit comes after some petitioners argued before court that the regulator’s plea seeking six more months to probe the Adani matter be quashed on grounds that Sebi had already been investigating Adani Group.
While hearing the matter on Friday, the Bench had indicated it was in favour of granting three more months to Sebi to complete its probe. In its latest affidavit, Sebi reiterated that more time was needed to ensure “carriage of justice”.

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“The application for extension of time filed by Sebi is meant to ensure carriage of justice, keeping in mind the interests of investors and the securities market since any incorrect or premature conclusion of the case arrived at without full facts of material on record would not serve the ends of justice and hence, would be legally untenable,” it observed.
Sebi for the first time disclosed publicly that it had approached 11 overseas regulators as regards its investigation around potential violations of the minimum public shareholding norms by Adani Group of companies.

“In the context of an investigation into minimum public shareholding norms, Sebi has already approached 11 overseas regulators under the multilateral memorandum of understanding (MMoU) with the International Organization of Securities Commissions (IOSCO). Several requests for information were made to these regulators. The first request to overseas regulators was made as early as October 6, 2020,” submitted Sebi.
The regulator further said it had submitted to the expert committee constituted by the SC on the steps taken, responses received, and the status of information gathered under the MMoU of IOSCO. Meanwhile, some petitioners and the Opposition Congress took to social media alleging discrepancies in submissions around the Adani investigations by the government.

“The Minister of State (MoS) for Finance Pankaj Chaudhary told the Lok Sabha (LS) on July 19, 2021, that Sebi was investigating Adani Group. Now Sebi tells the SC that it has not been investigating any of the serious allegations against Adani! Which is worse — misleading Parliament, or being fast asleep as lakhs of investors are duped by alleged money laundering and round-tripping using offshore shell companies?” tweeted Congress Member of Parliament Jairam Ramesh.
“The government stands by its reply in the LS on July 19, 2021, to question no. 72, which was based on due diligence and inputs from all concerned agencies,” the finance ministry tweeted.

This was in response to Congress Spokesperson Jairam Ramesh posting a screenshot of the written reply made by MoS for Finance Pankaj Chaudhary on July 19, 2021.
The damning January 24 report of Hindenburg Research had alleged that some of these funds based out of Cyprus and Mauritius were proxies of Adani’s that were used to manipulate stock markets and funnel money.

Adani Group has denied all allegations.
On petitions seeking probe into the allegations, the SC had asked Sebi to wind up its probe against Adani Group in two months. That deadline ended earlier this month and Sebi sought six more months to complete the probe.
Petitioners, however, contested that Sebi had been probing Adani Group since 2016 and shouldn’t be given a six-month extension.

Adani Enterp.

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First Published: May 15 2023 | 7:24 PM IST

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