According to Live Law, the Supreme Court granted the Securities and Exchange Board of India an extension till August 14 to finish its inquiry into charges of stock manipulation by the Adani Group.
The Supreme Court urged the regulator to begin an investigation in March after American company Hindenburg Research claimed in a report on January 24 that billionaire Gautam Adani’s organization was carrying off the “largest con in corporate history.”
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According to the corporation, the conglomerate was involved in accounting fraud, unlawful use of tax havens, and money laundering. The Adani Group has denied the charges, but the news has caused the stocks of the conglomerate’s listed firms to plummet.
Following this, the judges directed the regulator to provide a report by May 2.
However, on April 29, the market regulator requested a six-month delay to conclude its investigation into suspected Adani Group violations. It requested further time, citing complicated transactions involving the conglomerate’s public, unlisted, and offshore subsidiaries.
During the hearing on Wednesday, a bench comprising of Chief Justice of India DY Chandrachud and Justices PS Narasimha and JB Pardiwala requested that SEBI provide a status report on its investigations into the company.
Tushar Mehta, Solicitor General of India, appeared for SEBI and requested the court to reconsider the August deadline.
“You tell us what you’ve done because we’ve already given you two months,” stated the top justice. “We have granted you an additional three-month extension, bringing the total to five months.” We are not extending the deadline indefinitely. If there is a genuine problem, please notify us.”
The bench requested assistance from the expert committee it had formed to investigate ways to protect the interests of investors. It also ordered the panel, chaired by retired Supreme Court Justice AM Sapre, to communicate its findings with the parties in the case.
The case was scheduled for a hearing on July 11th.
SEBI denies investigating Adani Group since 2016
The market regulator notified the court on May 15 that it has not been examining the Adani Group since 2016.
However, SEBI’s declaration contradicted a response by the Union Finance Ministry in 2021, which stated in the Lok Sabha that the market regulator was examining the Adani Group for regulatory compliance.
The ministry’s response also revealed that in 2016, SEBI ordered the accounts of three funds – Albula Investment Fund, Cresta Fund, and APMS Investment Fund – to be frozen in connection with the issuing of global depository receipts. These funds have investments in Adani Group enterprises.
According to Live Law, the solicitor general stated on Wednesday that the SEBI probe in 2016 was connected to a separate matter and had nothing to do with the charges in the Hindenburg report.
“In 2016, SEBI issued an order affecting 51 Indian listed companies,” Mehta explained. “None of this group’s companies were among those 51.”
After counsel Prashant Bhushan expressed concerns about the subject, the solicitor general stated that he will shortly write an affidavit clarifying the government’s stance.
Congress again demands a JPC probe
Following the hearing, Congress stated that the Supreme Court-monitored inquiry is restricted to security legislation violations and that a Joint Parliamentary Committee investigation is required to uncover the truth behind the claims lodged against the Adani Group.
Congress General Secretary (Communications) Jairam Ramesh called it a “Modani scam” and detailed the nature and scope of the “unprecedented quid pro quo” between the Centre and the Adani Group.
According to Ramesh, these quid pro quo transactions led in:
“1. The subversion of every branch of government, particularly India’s investigative and regulatory agencies.” 2. The alignment of our foreign policy with Modani’s business interests. 3. Snaring of LIC [Life Insurance Corporation], EPFO [Employees Provident Fund Organisation], SBI [State Bank of India], and jeopardizing shareholder and public money interests. 4. The massive infusion of illegal wealth into India from Adani-linked offshore shell businesses. 5. A shift in regulations and policies in support of Adani’s domestic acquisitions.”
Since the Budget Session, the Congress has been calling for a Joint Parliamentary Committee inquiry into the Adani Group.
