The Supreme Court on Wednesday granted the Securities and Exchange Board of India additional time till August 14 to complete its investigation into the allegations of stock manipulation by the Adani Group, reported Live Law.

In March, the Supreme Court had asked the regulator to conduct an inquiry after American firm Hindenburg Research in a report on January 24 alleged that billionaire Gautam Adani’s group was pulling off the “largest con in corporate history”.

It company claimed that the conglomerate has been involved in accounting fraud, improper use of tax havens and money laundering. The Adani Group has rejected these allegations but the report still pummeled the stocks of the conglomerate’s listed companies.

After this, the judges had asked the regulator to submit a report by May 2.

But on April 29, the market regulator had asked for a six-month extension to complete its probe into possible lapses by the Adani Group. It sought more time citing complex transactions involving the conglomerate’s listed, unlisted and offshore entities.

At Wednesday’s hearing, a bench comprising Chief Justice of India DY Chandrachud and Justices PS Narasimha and JB Pardiwala asked SEBI to file a status report on its investigations against the conglomerate.

Solicitor General of India Tushar Mehta, appearing for SEBI, urged the court to re-consider the August deadline.

“You tell us what you have done because we had already granted you two months,” the chief justice said. “We have granted you now further extension of three months which makes it five months. We are not granting an indefinite extension of time. If there is some genuine difficulty, you let us know.”

The bench asked the expert committee it had set up to to examine mechanisms to protect the interests of investors to assist the court on the issue. It also directed the panel led by former Supreme Court judge Justice AM Sapre to share its report with the parties in the case.

The court listed the matter for further hearing on July 11.

SEBI denies investigating Adani Group since 2016

At the last hearing on May 15, the market watchdog had informed the court that it had not been investigating the Adani Group since 2016.

However, SEBI’s statement contradicted a reply by the Union finance ministry in 2021, which had said in the Lok Sabha that market regulator was investigating the Adani Group in connection with compliance of regulations.

The ministry’s reply also showed 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.

On Wednesday, the solicitor general claimed that the 2016 investigation by SEBI was related to a different issue and has no nexus with the allegations in the Hindenburg report, reported Live Law.

“In 2016, SEBI passed an order pertaining to 51 listed companies of India,” Mehta said. “No company of this group was a part of those 51 companies.”

The solicitor general added that he will soon file an affidavit to clarify the government’s position on the matter after advocate Prashant Bhushan raised questions on the issue.

Congress again demands JPC probe

After the hearing, the Congress said the Supreme Court-monitored investigation is limited to violation of security law and that a Joint Parliamentary Committee probe is needed to unravel the truth behind the allegations levelled against the Adani Group.

Terming it a “Modani scam”, Congress General Secretary (Communications) Jairam Ramesh listed the nature and extent of “unprecedented quid pro quo” between the Centre and the Adani Group.

According to Ramesh, these quid pro quo deals led to: “1. The subversion of every branch of the government, especially India’s investigative and regulatory agencies. 2. The yoking of our foreign policy to Modani’s financial interests. 3. Ensnaring of LIC [Life Insurance Corporation], SBI [State Bank of India], EPFO [Employees Provident Fund Organisation] and compromising interests of the shareholders and public money. 4. The liberal inflow of unaccounted funds into India from offshore shell companies tied to the Adani’s. 5. The change of rules and policies to favour Adani’s domestic acquisitions.”

The Congress has been demanding a Joint Parliamentary Committee investigation into the Adani Group since the Budget Session.