Adani Hindenburg Issue | Supreme Court Adjourns SEBI's Application Seeking Extension Of Time For Probe To July 10
The Supreme Court has adjourned to July 10 the application filed by the Securities and Exchange Board of India (SEBI) seeking six months more time to complete its probe into allegations made by US-based short seller firm Hindenburg Research against Adani group companies about stock price manipulations. Last week, while hearing the application, a bench comprising Chief Justice DY Chandrachud,...
The Supreme Court has adjourned to July 10 the application filed by the Securities and Exchange Board of India (SEBI) seeking six months more time to complete its probe into allegations made by US-based short seller firm Hindenburg Research against Adani group companies about stock price manipulations. Last week, while hearing the application, a bench comprising Chief Justice DY Chandrachud, and Justices PS Narasimha and JB Pardiwala indicated that it could not allow more than three months to finish the entire exercise. The two months’ time originally allowed by the apex court as per its March 2 order ended on the day of the last hearing, i.e., May 2.
Although the bench had said on May 12 that it will hear the matter on May 15, after considering the report of the expert committee led by ex-judge Justice AM Sapre, the matter could not be taken up yesterday.
Yesterday , SEBI filed a rejoinder affidavit in the Supreme Court giving additional reasons for seeking more time to probe into the Adani-Hindenburg issue. SEBI has stated that the transactions are complex and require more time to examine. The securities board has also denied the allegation made by the petitioner that it had been investigating Adani since 2016. It has been claimed that the investigation actually pertained to the issuance of Global Depository Receipts by 51 Indian listed companies, which did not include any listed company of Adani Group. SEBI has informed the apex court bench that it has already approached eleven overseas regulators under the Multilateral Memorandum of Understanding (MMOU) with International Organisation of Securities Commissions (IOSCO) with respect to its investigation into Minimum Public Shareholding (MPS) norms.
Background
It was on January 24 that US-based Hindenburg published its report accusing Adani group of widespread manipulations and malpractices to inflate its stock prices. Adani Group refuted the allegations by publishing a 413-page reply.
On March 2 2023, the court constituted a committee and appointed the following persons as the members of the committee– Mr OP Bhat (former Chairman of SBI), retired Justice JP Devadhar, Mr KV Kamath, Mr Nandan Nilakeni, Mr. Somasekharan Sundaresan. The Committee was held to be under the head of former Supreme Court judge Justice AM Sapre. The court directed the committee to submit its report in a sealed cover before this court within 2 months. However, the court remarked that the constitution of the expert committee did not divest SEBI of its powers or responsibilities in continuing with its investigation into the volatility in the securities market in India. SEBI was also directed to submit a status report within a period of two months.
Later, the SEBI filed an application in the Supreme Court seeking a six-month extension to complete its probe into allegations.
The SEBI in its application said that examinations/investigations for which further time would be required would fall into three broad categories :
(i) Those where prima facie violations have been found and a period of 6 months would be required to arrive at conclusive finding.
(ii) Those where prima facie violations have not been found, a period of 6 months would be required to revalidate the analysis and arrive at conclusive finding.
(iii) In cases where, further examination/investigation is required and most of the data that is required for this purpose is expected to be reasonably accessible, a conclusive finding is expected to be arrived at in 6 months.
Update on May 17, 2023 | BREAKING | Adani-Hindenburg : Supreme Court Extends Deadline For SEBI Probe Till August 14
Case Title: Vishal Tiwari v. Union of India & Ors. | Writ Petition (Civil) No. 162 of 2023 and other connected matters