India market regulator SEBI approaches SC seeking six-month extension to complete Adani probe

SEBI has also told SC that it may require to depose “key managerial persons” from the seven listed Adani companies before the investigation into the allegations made by Hindenburg can be concluded.

Market regulator Securities and Exchange Board of India (SEBI) has approached Supreme Court seeking an additional six months’ time to complete the probe in the Adani-Hindenburg saga.

Taking note of the fact that SEBI was already seized of the investigation into the allegations made against Adani Group companies, Supreme Court had asked it to further investigate into violation of Rule 19A of the Securities Contracts (Regulation) Rules 1957, failure to disclose transactions with related parties and other relevant information concerning SEBI related parties and also into the manipulation of stock prices in contravention of existing laws and conclude the same in two months.

Laying emphasis on the “complexity involved in the matter,” SEBI in the application has said, “Keeping in view the forgoing circumstances, it would take further time to arrive at verified findings and conclude the investigation referred to herein above. SEBI also respectfully submits 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 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 respect of 12 suspicious transactions pertaining to misrepresentation of financials, circumvention of Regulations, and fraudulent nature of transactions has said that it has noted prima facie that “these are complex” and “have many sub transactions” which thus require rigorous investigation.

SEBI said that investigations into possible violations of related party transactions disclosure, Corporate Governance related matters, Minimum Public Shareholding norms, FPI regulations, ODI norms, insider trading regulations, norms of short selling, and share proof manipulation would require further time.

SEBI has also told SC that it may require to depose “key managerial persons” from the seven listed Adani companies before the investigation into the allegations made by Hindenburg can be concluded. It has also stated that prima facie findings have been shared with the expert committee.

“Investigation would also require obtaining bank statements from multiple domestic as well as international banks and as the bank statements would also be for the transactions undertaken more than 10 years ago, this would take time and be challenging. SEBI further submits that this process of seeking bank statements from the offshore banks would entail taking assistance from offshore regulators, which may be time-consuming and challenging,” the application states.