Adani-Hindenburg Case: An expert committee of the Supreme Court has said that it cannot conclude any regulatory failure regarding the spurt in Adani Group’s shares.
Adani-Hindenburg Case Update: An expert committee of the Supreme Court has said that it cannot conclude any regulatory failure regarding the spurt in Adani Group’s shares. The committee has also said that SEBI has not been able to collect any evidence in its investigation of alleged violations of money flow from foreign entities.
Evidence was found of creating short positions earlier
The six-member committee, however, noted that there was evidence of creation of ‘short positions’ in Adani Group shares before the report by US-based financial research and investment firm Hindenburg Research and booking of profits in these deals when prices fell after the Hindenburg report. .
The report has been submitted to the Supreme Court
The committee has said in the report submitted to the Supreme Court that keeping in mind the clarification of SEBI on the basis of data. It will not be possible for the committee to conclude that there has been any regulatory failure in the allegation of price rigging. The report further stated that there is a need for an effective enforcement policy, which is in consonance with the statutory position of SEBI.
SEBI is probing the allegations
The committee said that it also cannot say that there has been a regulatory failure on the part of SEBI on minimum public shareholding norms or related party transactions. Markets regulator SEBI was probing the allegations against the Adani group and parallel to that the committee was appointed by the apex court.
Adani Group told the allegations as baseless
After Hindenburg’s allegations, there was a huge fall in the shares of Adani Group. The Adani group has termed these allegations as baseless. The expert committee was headed by Justice AM Sapre, a retired judge of the Supreme Court. It included OP Bhatt, KV Kamath, Nandan Nilekani and Somasekhara Sundaresan.
The stake of FIIs will be investigated
The report said that the foreign portfolio investors’ stake in Adani’s listed companies was investigated due to SEBI’s suspicion that the ultimate chain of ownership of 13 foreign entities holding stake in Adani Group was not clear. SEBI has come to know about 42 contributors to assets under management of 13 foreign entities and information is being gathered about them.
According to the report released
‘SEBI has had a suspicion for a long time that some public shareholders are not actually public shareholders and may be fronts of the promoters of these companies.’ SEBI has not been able to determine the ultimate ownership of these 13 entities despite carrying out investigations with the help of the Enforcement Directorate and the Income Tax Department.
Got time till August 14 for investigation
The committee said that the market has re-evaluated Adani’s shares. ‘Though they have not returned to the pre-January 24 level, but are stable at the new level. The committee said that as per the data, after January 24, 2023, the risk appetite of retail investors in Adani’s shares has increased, although the Indian stock markets as a whole are not volatile. Earlier this week, the court gave Sebi time till August 14 to complete the probe into the allegations against the Adani group.
