Sebi has got time till August 14 to complete Adani probe

Additionally, the court directed SEBI to provide a specific report on its probe into alleged violation of minimum public shareholding (MPS) norms by some Adani companies. As per SEBI regulations, a publicly traded company should have a minimum public shareholding of 25%.

“We have given you two months time vide our order dated March 2. We are extending this time till 14th August. You already get a total of five months. We cannot give you an indefinite extension of time. You show us what you have done by August 14, and then we will see whether we should extend this time…say till September 30,” it told Solicitor General Tushar Mehta, who represented Sebi in the PILs filed earlier. was represented. They are demanding a court-monitored probe into the Adani-Hindenburg affair.

An affidavit filed by SEBI on Monday said that it had first approached foreign regulators on October 6, 2020, in the context of probe into MPS of some Adani companies. The affidavit, however, did not apprise the apex court about the status or outcome of this probe.

SEBI, on its part, agreed to bring on record the latest status of the probe in the matter of MPS norms, even as it said that in July 2021, the junior finance minister said in a reply to Parliament that “SEBI is probing some Adani group companies. Regarding compliance with SEBI regulations” refers only to MPS norms and has nothing to do with Hindenburg Report.

Chief Justice of India Dhananjay Y. The regulator’s statement before the Chandrachud-led bench came in response to the controversy that erupted after Sebi’s Monday affidavit said it was “factually baseless” that it has been probing the Adani group since 2016. Was going Filing a brief affidavit on Wednesday, it said the 2016 probe pertains to issuance of Global Depository Receipts (GDRs) by 51 Indian listed companies, and none of the Adani Group’s listed companies were part of it.

Fixing the matter for next hearing on July 11, the top court on Wednesday also directed that copies of the report submitted by the six-member panel, which was set up by the court in March to look into regulatory failure and violation of laws be shared with SEBI and the PIL petitioners “to enable them to assist in further deliberations”.

While Sebi had given at least six months to complete the probe into allegations of price manipulation of Hindenburg shares and accounting fraud by the Gautam Adani-led group, the apex court said it would first have to do so by August 14. Will review the investigation. before deciding whether additional time should be granted.

The court informed the parties that its panel headed by retired Justice AM Sapre has submitted a “provisional” report keeping in view the two-month deadline set by the March 2 order.

“To enable the court and the parties to analyze the report of the committee, the proceedings will be listed after the summer vacation. The expert committee is requested to continue to assist the court and in the meantime carry out further deliberations. The committee is requested to take any other aspect or suggestion for further proceedings,” directed the bench, also comprising Justices PS Narasimha and JB Pardiwala.

Regarding SEBI’s probe into the matter of MPS norms, the bench, considering on record submissions made by advocate Prashant Bhushan that it is one of the aspects of the ongoing probe into the allegations against the Adani Group, directed the regulator to look into the matter Keep on record the progress made in In this regard too.

The Hindenburg Report, released on 24 January, claimed “brazen accounting fraud” and “stock manipulation” by the Gautam Adani-led group. Although the group dismissed the report as “unrefined” and “maliciously mischievous”, it triggered a steep decline in Adani Group shares, which lost over $140 billion in days and led to the cancellation of a Forced to 20,000 crore share sale in the flagship of the group.

The Adani Group, however, denied the allegations of stock market manipulation and accounting fraud by Hindenburg.

Sebi’s additional affidavit on Monday had sparked a political row. While this affidavit described it as “factually baseless” that the Adani group was under investigation by the regulator since 2016, several opposition leaders cited a July 2021 reply by a junior finance minister in parliament that said “Sebi Adani Group Investigating some of the companies. With regard to compliance with SEBI regulations”. The affidavit further states that since 2016 no listed company of the Adani group has been investigated for suspected misuse of GDR instruments to remit black money back to India.

Attacking SEBI’s stand in the apex court, senior Congress leader and former Union minister Jairam Ramesh on Monday afternoon tweeted a written reply by Union Minister of State for Finance Pankaj Chowdhary dated July 19, 2021 that SEBI is probing the Adani group.

“Now, SEBI has told the Supreme Court that they are not probing any serious allegation against Adani! What is worse – misleading Parliament or sleeping soundly over millions of investors being duped by alleged money laundering and round-tripping using offshore shell companies? Or worse, was there a stopping hand from above?” Ramesh posted, attaching a reply to the junior minister’s tweet.

Shiv Sena leader Priyanka Chaturvedi also tweeted on Monday: “Was the junior finance minister lying to the country about the investigation in his reply on 19 July 2021? It smacks of a cover-up, but at whose behest?”

During the proceedings on Wednesday, Mehta sought to clarify the regulator’s position on behalf of Sebi as he opposed Bhushan’s plea that the regulator should record the status of all investigations against Adani group companies.

“Confusion has been created because they lift something from 2016 and link it with something in 2020 or 2021. The 2016 investigation is completely different from what is being alleged in these petitions. They now want all kinds of investigations to be done here, but this is not the limit of these proceedings,” Mehta said.

The SG said Chowdhary’s statement in Parliament was about the probe into the MPS norms matter initiated in 2020 and had nothing to do with the 2016 probe into the Global Depository Receipt (GDR) cases.

Sebi’s affidavit on Monday regarding examination of MPS regulations said the regulator has already approached 11 foreign regulators under the multilateral MoU with International Organization of Securities Commissions (IOSCO) and the first request to foreign regulators will be made at the earliest. it was done. By October 2020.

To this, Bhushan insisted that SEBI be asked to place on record the latest status report of its investigation into the MPS regulations. The court accepted his request and fixed the next hearing on July 11.