Adani-Hindenburg row: Supreme Court gives SEBI time till August 14 to complete probe

Satya Prakash

New Delhi, May 17

The Supreme Court on Wednesday granted three additional months to SEBI to complete the probe into allegations of stock price manipulation by the Adani Group and any possible lapses in regulatory disclosures.

“We initially allowed you two months…Have now granted three more months…Have effectively given five months now. SEBI can share the status of the probe in August, and if there is a genuine issue, we will consider (giving further time),” a Bench led by CJI DY Chandrachud told Solicitor General Tushar Mehta, who represented SEBI.

The court’s comments came after Mehta submitted that the market regulator would need six months to complete the probe.

On behalf of the petitioners, advocate Prashant Bhushan alleged that SEBI has been probing the Adani group for several years.

Citing a reply given in Parliament in 2021, Bhushan said it indicated that the Adani group was probed. He said SEBI must put on record the status of investigation as he opposed extension of time sought by the market regulator, terming it an attempt to shield the Adani group.

The Solicitor General countered Bhushan’s submissions, saying, “SEBI has the wherewithal and they are dealing with it. You pick up something in 2016 and then connect it with the Hindenburg Report… 2016 is something totally different and distinct. They (petitioners) want whatever investigation carried against the company has to be placed and that is not the remit.”

Mehta said, “The minister had stated that SEBI is probing some companies with compliance regulation. This probe had commenced in 2020 and the minister’s statement is not for the probe originating in 2016. SEBI has stated that the current status is submitted to the expert committee. SEBI has already approached 11 overseas regulators,” Mehta said.

In its order, the Bench recorded that the expert committee led by Justice AM Sapre (retd) has submitted a report within the stipulated time of two months.

“In order to enable the court and counsel to analyse the report of the committee, the proceedings shall be listed after the summer recess. The expert committee is requested to assist the court and the committee to hold further deliberations and take up any further aspect or suggestion for the proceedings,” the Bench noted.

Directing copies of the expert committee report to be made available to the parties and their advocates to enable them to take necessary action, the Bench posted the matter for July 11.

In its March 2 order, the Bench had asked SEBI to expeditiously conclude the investigation within two months and file a status report.

However, in an application filed before the expiry of the two-month period on May 2, SEBI submitted last month that for ascertaining possible violations related to “misrepresentation of financials, circumvention of regulations and/or fraudulent nature of transactions”, it would take six more months to complete the exercise.

A six-member expert committee headed by former Supreme Court judge AM Sapre set up by the top court to investigate possible regulatory failures in dealing with alleged contravention of laws pertaining to the securities market in relation to the Adani group or other companies in the wake of the Hindenburg Research report has already submitted its report in a sealed cover.

Advocate Vishal Tiwari — one of the PIL petitioners — opposed SEBI’s plea for extension of time, saying it has already got sufficient time to inspect, examine, collect and seize relevant documents.