Founder of US-based Short Seller Hindenburg Research Nathan Anderson and Chairperson of Adani Group Gautam Adani
The Supreme Court of India has adjourned to May 15, the hearing of the Securities and Exchange Board of India’s (SEBI) application seeking 6 months additional time to complete the probe into US-based short seller Hindenburg Research’s report and alleged stock price manipulation of Adani Group companies.
The Court orally said that it could not provide SEBI with 6 months additional time, however, indicated that it can grant 3 months’ time maximum. The Court granted two months’ time to SEBI through its March 2 order, which ended on May 2.
SEBI’s counsel Solicitor General of India Tushar Mehta argued that 6 months additional time is needed considering the complexities of the case. He further submitted that as per the SEBI’s application at least 15 months are needed, however, it will take best efforts to complete the investigation within 6 months’ time.
However, the Chief Justice of India DY Chandrachud said, “Six months is an unfair time…we will place the matter around 14th August. You complete your investigation in three months and come back to us. There has to be alacrity.. We can’t say you need minimum 6 months. SEBI cannot take an indefinitely long period.”
Advocate Prashant Bhushan, appearing for one of the petitioners, opposed SEBI’s application and submitted that SEBI is a member of the International Organisation of Securities Commission and therefore, it is not difficult to procure information from foreign countries regarding international transactions. Furthermore, he submitted that SEBI’s stand is that it started to investigate some of the alleged benami transactions back in 2017.
The Solicitor General said that 6 months is a reasonable estimate considering the case. However, the Court decided to adjourn the hearing and said that it wished to read the Expert Committee’s report constituted by the Supreme Court and led by Justice AM Sapre.
Background
On March 2, the apex court directed the capital market regulator SEBI to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report, which led to a massive wipe-out of more than USD 140 billion of the Adani Group’s market value.
In an application moved before the Supreme Court, SEBI submitted that keeping in view the forgoing circumstances, it would take further time to arrive at verified findings and conclude the investigation.
SEBI, in the application also submitted that for ascertaining possible violations related to misrepresentation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions mentioned herein above, given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months.
“SEBI, in the forgoing circumstances, most respectfully submits that in order to enable SEBI to conduct a proper investigation and arrive at verified findings, it would be just, expedient and in the interest of justice that this Court may be pleased to extend the time to conclude the investigations as directed in the common order dated 02.03.2023, by at least 6 months,” SEBI said.
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