Sebi seeks 15 more days from Supreme Court for Adani report

The Securities and Exchange Board of India (Sebi) on Monday asked the Supreme Court for another 15 days to complete its investigations and submit a status report on the allegations made by US short-seller Hindenburg Research against the Adani Group. The market watchdog said "substantial work" has been done as it sought more time.

The apex court had on May 17 given Sebi time until August 14 to complete its probe into Hindenburg's allegations and the subsequent crash that wiped billions of dollars from the market capitalisation of Adani Group's listed companies following the January report.

In its application seeking more time, Sebi told the court it has finished the investigation into 17 out of 24 transactions. These findings have been approved by the competent authority in accordance with Sebi's procedures. In one case, Sebi has completed the investigation based on the material that could be gathered and an interim report has been prepared. The regulator has sought information from overseas agencies and regulators, among others and will evaluate this to determine the further course of action.


"Out of the remaining six matters, in four investigations/examinations, findings have been crystallised and the reports prepared consequent thereto are in the process of approval by the competent authority," Sebi said in its affidavit.

Sapre panel
"Sebi expects to complete the approval process in respect of the four matters shortly and in any event before the next date of hearing on August 29," it said.

In the remaining two matters, investigations are at an advanced stage in one. In the other, an interim report is under preparation based on information gathered by Sebi so far.

A bench headed by Chief Justice DY Chandrachud had ordered an investigation into Hindenburg's allegations following several PILs that sought direction to the government and Sebi to probe the matter.

On March 2, the Supreme Court had set up a six-member expert committee, headed by former Supreme Court judge AM Sapre, "to investigate if there was a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies". The Sapre panel said it would not be possible to conclude that there was a regulatory failure on Sebi's part in its handling of certain allegations of violations against Adani Group companies in a report submitted to the Supreme Court on May 8.

There was no evidence of stock price manipulation in Adani Group companies, the panel said. However, there was evidence of a build-up in short positions on Adani Group stocks ahead of the Hindenburg Research report. Profits were earned from squaring off positions after prices crashed after its publication.

The Hindenburg report had accused the conglomerate of "stock price manipulation" and "accounting fraud". The Adani Group rejected the report.

The Supreme Court had asked Sebi to investigate whether there had been a violation of minimum public shareholding (MPS) norms in public limited companies, any failure to disclose transactions with related parties, and if there was any manipulation of stock prices.