New Delhi: The Supreme Court on Wednesday refused to allow a probe by a special investigation team into allegations against the Adani Group following a report by Hindenburg Research a year ago.
It directed the Securities and Exchange Board of India to expedite its investigation into two remaining cases involving the Adani Group within three months. The court also asked the government and the markets regulator to examine the Hindenburg report on short selling for potential legal violations and take necessary action.
After the verdict, shares of Adani Enterprises jumped 2.98% to ₹3,019.30 apiece on BSE.
On 24 January 2023, Hindenburg Research released a report alleging malpractices at Adani Group companies, leading to the cancellation of a $2.4 billion share sale and a significant drop in the group’s market capitalisation.
Adani Group had issued a 413-page response denying the allegations.
Subsequently, public interest litigations were filed in the Supreme Court seeking a court-monitored probe. On 2 March, the Supreme Court formed a committee headed by former Supreme Court judge Justice A.M. Sapre to investigate the matter.
The committee, comprising experts such as O.P. Bhat, retired Justice J.P. Devadhar, K.V. Kamath, Nandan Nilekani, and Somasekhar Sundaresan, aimed to assess the regulatory framework and recommend ways to strengthen it.
The committee highlighted issues with the regulations for foreign portfolio investors and the removal of restrictions on FPIs with an “opaque structure” by Sebi in 2018 and 2019.
Sebi, in a 41-page affidavit, disagreed with the committee’s views, defending its stance on identifying economic interest holders behind offshore funds.
In a reserved judgement on 24 November, the Supreme Court bench said it would not be appropriate to appoint a special investigation team without evidence of lapses by Sebi, which was already investigating the matter. The court emphasised the need for concrete evidence and expressed reluctance to order a probe based solely on media reports.
Sebi told the court it did not need an extension to conclude its inquiry. The regulator said it has concluded 22 out of 24 cases, and was awaiting information from foreign regulators for the remaining two.
Earlier, the court had granted Sebi an extension until 14 August to complete its investigation.
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Published: 03 Jan 2024, 11:43 AM IST