Hindenburg-Adani row: SC extends time for SEBI to complete its probe till August 14

The bench told Solicitor General Tushar Mehta, who appeared for SEBI and sought time till at least September 30, that it had already granted two months time and that in case there is a genuine difficulty, it can tell the court on August 14.

The SEBI had sought six more months from the court to complete the probe but the petitioners opposed this.

The bench, also comprising Justices P S Narasimha and J B Pardiwala, ordered that the report of the Justice A M Sapre expert committee, which was set up by the court to inquire into the allegations, be made available to the parties involved.

Fixing the matter for hearing next on July 11, the bench asked the expert committee to continue to assist the court. “The committee may hold further deliberations in the meantime,” it said.

“The committee would be requested to take up any further aspects of suggestions as may be formulated by the court, following the course of deliberations, when the proceedings are next listed for hearing. Copies of the report of the expert committee shall be made available to parties and their counsel to enable them to assist the court in the course of further deliberations,” the bench said.

Advocate Prashant Bhushan, appearing for a petitioner, said SEBI had “admittedly” been investigating the Adani Group of companies even before and that it should place on record before the court the outcome of those investigations.

This was opposed by Mehta, who said the petitioner was seeking a “roving inquiry”.

The CJI, too, said, “We are dealing right now with the fallout of the Hindenburg report. The purpose of these proceedings is not for us or for any public interest petitioner to conduct a roving inquiry…”

Bhushan, however, said these probes were directly related to the Hindenburg report and alleged that there is an “attempt to shield the Adani companies in recent years”.

“They have to put on record as to what has happened to these investigations, which they have been doing since at least 2016 and 2020 etc. Otherwise, what is happening is there is clearly, somehow, an attempt to shield the Adani companies in recent years. Prior to that, there are any number of SEBI as well as Securities Appellate Tribunal orders freezing Adani’s trading on the stock market… But in recent years, despite several complaints having been made to SEBI… it appears they are doing absolutely nothing despite it being written on the wall….,” he said.

Bhushan also referred to a statement by the Minister of State for Finance in Parliament on the probe against Adani group companies.

The SG, however, said the 2016 probe “is something totally different, distinct and completely separate. The petitioners now want that whatever investigations or proceedings were taken against a particular company till now should be placed on record. I don’t think that’s the remit…”.

Meanwhile, clarifying what the minister said in Parliament, SEBI in an affidavit told the court that he “in his reply to Parliament on July 19, 2021 had confirmed that “…SEBI is investigating some Adani Group companies with regard to compliance with SEBI regulations”.

The market regulator said, “It may be noted that the investigation referred to was in regard to possible non-compliance with Minimum Public Shareholding (MPS) norms and consequential violations. This investigation commenced in October 2020. It is hereby confirmed that the investigation referred to by the Hon’ble Minister had not commenced in 2016.”

SEBI said it had made a statement to the SC “that it is examining/investigating the allegations made in the Hindenburg report”.

“One of these allegations was related to non-compliance with MPS norms…” and “current status of this investigation has been submitted to the expert committee constituted by the Court”, it said.

The market regulator said that in the context of investigation into MPS norms, it has already approached 11 overseas regulators under the multilateral Memorandum of Understanding with the International Organisation of Security Commissions. “The first of these requests was made as early as on October 6, 2020,” Mehta said. “It was this investigation that commenced in October 2020 that was referred to by the Minister of State for Finance in his reply in Parliament.”

The 2016 probe was about Global Depository Receipts by 51 Indian listed companies and no registered company of Adani Group was among them, he said.