Hindenburg report: SC grants Sebi time till August 14 to probe Adani Group

Taking up Sebi application, the SC bench told the regulator to file an updated report on August 14

The Supreme Court on Wednesday granted Sebi further time till August 14 to complete its probe into Adani Group of companies, while rejecting the plea for additional six months saying it can't extend the time till indefinite period.

The probe by the market regulator began after US short seller firm Hindenburg's report on January 25 alleged "accounting fraud" and "brazen stock manipulation" against the Adani Group.

Taking up Sebi application, a bench of Chief Justice of India D Y Chandrachud and Justices P S Narasimha and J B Pardiwala told the regulator to file an updated report on August 14.

The bench also directed to share a copy of the report filed by the Justice Abhay Manohar Sapre committee, appointed by it.

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"The expert committee has submitted its report within the two months timeline. The proceedings shall be listed after recess on July 11. Expert committee is requested to further advise the court. The committee may take up further aspects as may be suggested, following the course of deliberations by the court," the bench said in its order.

Advocate Prashant Bhushan, appearing for a petitioner, submitted that the SEBI has been investigating Adani for many years (in 2016 and in 2021), seeking a direction to the SEBI to put the findings on record.

"They are doing absolutely nothing, if Adani's shares increase tremendously, then alarm bells have to be rung. They have said in Parliament that they were investigating Adani. They have to tell us what has happened in those investigations," he said.

Advocate Vishal Tiwari, appearing as a party in person, submitted the SEBI has not even apprised the court whom they have appointed to undertake the investigation.

Solicitor General Tushar Mehta submitted the 2016 issue is something totally different, distinct and separate.

"They want that whatever proceedings were undertaken should be placed before court. That is not the remit but I have no problem in doing so," he said, emphasising that the six-month was a compressed time for the purpose.

On Monday, the SEBI had told the court that the allegation that it has been investigating against the Adani Group of companies since 2016 was "factually baseless".

In an affidavit, the market regulator had said its previous investigation related to Global Depository Receipts was conducted against 51 Indian listed companies. However, no listed company of Adani Group was part of the said companies.

On April 29, the SEBI moved the court seeking six-months extension of time for the purpose.

“For ascertaining possible violations related to mis-representation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions…..given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months,” it had said.

Acting on a batch of PILs filed by advocate Vishal Tiwari and others, the apex court had on March 2 set up a committee headed by the top court's retired judge Justice Abhay Manohar Sapre to investigate if there has been regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies.