Markets regulator Securities and Exchange Board of India told the Supreme Court on Monday that claims that it had been investigating the Adani Group since 2016 were “factually baseless”, Live Law reported.
SEBI made the submission in an affidavit to a bench headed by Chief Justice DY Chandrachud that is hearing two petitions seeking an investigation into allegations of stock manipulation by the Gautam Adani-led conglomerate.
In its affidavit, the markets regulator said that the investigation in question involved a probe into global depository receipts by 51 Indian companies. “However, no listed company of [the] Adani Group was part of the aforesaid 51 companies,” SEBI said in its affidavit.
Global depository receipts are certificates issued by banks to represent shares in a foreign company being traded in a domestic stock exchange.
A reply by the Union finance ministry in 2021in the Lok Sabha shows that SEBI was investigating the Adani Group in connection with compliance of regulations. The ministry’s reply also shows that in 2016, SEBI had ordered freezing accounts of three funds – Albula Investment Fund, Cresta Fund and APMS Investment Fund – in a matter related to issuance of global depository receipts. These funds own shares in Adani Group companies.
The petitions seeking an investigation into the Adani Group were filed in the wake of a report published in January by American firm Hindenburg Research alleging that the Adani Group have been engaging in stock manipulation and improper use of offshore tax havens for decades.
On March 2, the Supreme Court had directed SEBI to look into whether the Adani Group had violated rules on maintaining minimum public shareholding, whether it failed to disclose transactions with related parties and whether stocks had been manipulated. The court had also set up an expert committee to examine mechanisms to protect the interests of investors.
The court had asked SEBI to conclude its investigation within two months, a time period that ended on May 2. However, at a hearing last week, the markets regulator told the Supreme Court that it would need at least six months time to complete the investigation. The judges had said that it was not inclined to grant more than three months, The Indian Express reported.
In the affidavit filed on Monday, SEBI reiterated that it would need more time to complete its investigation, Live Law reported. “At least 15 months is actually needed, but the SEBI will make best possible efforts to complete the investigation in six months’ time,” Solicitor General Tushar Mehta told the court while submitting the affidavit.
The affidavit stated that prima facie, 12 transactions mentioned in the Hindenburg Research report “are highly complex and have many sub-transactions across numerous jurisdictions”. SEBI also warned against arriving at any “incorrect or premature conclusion” in the case, saying that would not “serve the ends of justice and hence would be legally untenable”, Live Law reported.