The Securities and Exchange Board of India (SEBI) has conveyed to the Supreme Court its decision not to seek an extension for the completion of its investigation into the Adani Group. Solicitor General Tushar Mehta, representing SEBI, reported that 22 out of the 24 cases related to the Hindenburg matter have been successfully resolved while awaiting responses from foreign regulators for the remaining two. In a development that could have far-reaching implications for the Adani Group, SEBI's commitment to concluding the investigation was made clear during the court proceedings.
The Supreme Court, having reserved its verdict on the Adani-Hindenburg issue, expressed confidence in SEBI's ongoing probe, dismissing any doubts or concerns surrounding the allegations. These allegations encompass a range of issues, including stock price manipulation. Importantly, the court underscored that it is not obliged to treat Hindenburg Research's report as an unequivocal representation of facts. Moreover, the court determined that there was no need to establish a special investigation team (SIT), emphasizing this decision in the absence of substantive material before the court.
The bench, led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, unequivocally stated that SEBI must bring its investigation to a close in all 24 cases related to the Adani Group. This directive reinforces the court's expectation for a comprehensive and conclusive resolution to the issues at hand. In an earlier hearing on August 25, SEBI had submitted a 'crucial status' report, providing insights into the progress of its investigations into the allegations of stock price manipulation by the Adani Group.
Addressing broader concerns related to extreme volatility in the stock market, the Supreme Court urged SEBI to take proactive measures to safeguard investors from potential wealth loss attributable to short selling or market volatility. This directive highlights the court's recognition of the importance of market stability and investor protection.
Crucially, the court reiterated that it does not need to treat Hindenburg Research's report as an absolute and undisputed truth. This stance places the onus on SEBI to thoroughly investigate the allegations and report its findings objectively and comprehensively.
During the proceedings, Solicitor General Mehta informed the court that SEBI had actively sought details from the Organised Crime and Corruption Reporting Project (OCCRP), the entity responsible for the allegations against the Adani Group in its August 31 report. However, OCCRP declined to share the information and suggested that it could be obtained from an Indian NGO allegedly run by Prashant Bhushan.
In response, Bhushan, representing one of the petitioners, raised concerns about the credibility of SEBI's probe. He argued that SEBI's role in the matter was "suspect" for various reasons, including its inability to thoroughly investigate due to amendments in Foreign Portfolio Investor (FPI) guidelines. He further urged the court to assess the credibility of SEBI's probe and consider the appointment of an independent organization or an SIT for further investigation.
Despite Bhushan's reservations, the bench expressed reluctance to direct SEBI based solely on media reports. The court sought clarification on whether SEBI found any wrongdoing as alleged by the short-seller. It's worth noting that the expert committee report released in May found no prima facie lapses on SEBI's part in the Adani issue.
The petitioners, seeking further scrutiny, have urged the court to appoint a Special Investigation Team. They also raised allegations that certain funds were managed by Vinod Adani, the older brother of Gautam Adani, and were involved in routing money for the Adani Group. The court is now in the deliberative phase, considering the complex issues at hand and determining the appropriate course of action in this high-profile case.
