Adani-Hindenburg Case: Linkage With 2016 Investigations 'Erroneous', Says SEBI

SEBI has reiterated that the 2016 and 2020 investigations pertain to different issues.

<div class="paragraphs"><p>A woman walks past the SEBI headquarters in Mumbai. (Photograph: Francis Mascarenhas/Reuters)</p></div>
A woman walks past the SEBI headquarters in Mumbai. (Photograph: Francis Mascarenhas/Reuters)

The Securities and Exchange Board of India filed an affidavit on Wednesday to clarify the stance taken by it before the Supreme Court in the Adani-Hindenburg matter.

In the hearings before the top court, the petitioners have said that the market regulator has been probing the Adani Group companies since 2016. In the hearing on Wednesday, Solicitor General Tushar Mehta responded, saying that in 2021, the Minister of State for Finance had confirmed that SEBI was investigating some Adani Group companies. But that investigation was with respect to compliance with SEBI regulations.

SEBI has clarified that the investigation referred to by the minister was in respect of possible non-compliance with minimum public shareholding norms and consequent violations. This investigation had commenced in 2020 and not 2016, the regulator said in its affidavit.

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It said that the current status of its investigation pertaining to the MPS norms has been shared with the expert committee constituted by the court. SEBI said that it has already approached 11 overseas regulators under the Multilateral Memorandum of Understanding with the International Organisation of Securities Commissions in the context of an investigation into the potential violation of MPS norms.

It pointed out that the linkage of the investigation emanating from the allegations made by Hindenburg Research with the 2016 investigation is erroneous. The latter pertains to the issuance of global depository receipts by 51 Indian listed companies. It reiterated that no listed company of Adani Group was part of the aforesaid list of 51 companies.

"However, there were some FPIs, including Cresta Fund Ltd., Albula Fund Ltd., and APMS Fund Ltd., whose GDR-relevant accounts of which were frozen as a consequence of the 2016 order. It is hereby clarified that this action was purely a consequence of the GDR matter and not related to any examination of any Adani Group company," SEBI said.

SEBI submitted these details during the hearing in the Adani-Hindenburg PILs matter on Wednesday.

After noting the arguments of both sides, the apex court accepted the request of the market regulator to give it more time to complete its investigation in the Adani-Hindenburg matter.

While SEBI had asked for at least six months, the apex court has given the regulator time till Aug. 14 to update the court on the course of its investigation.

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