Not seeking extension to finish probe into Adani-Hindenburg matter: Sebi to SC

New Delhi: The Securities and Exchange Board of India (Sebi) on Friday informed the Supreme Court that it does not need additional time to complete its investigation into the Adani Group, with 22 of the 24 cases related to the Hindenburg matter already resolved. The probe's remaining aspects hinge on data from foreign regulatory bodies.

The apex court's three-judge panel, led by chief justice D. Chandrachud, has concluded hearings on several petitions demanding an inquiry into the Adani-Hindenburg matter, and asked for written submissions by Monday.

On 24 January, US-based Hindenburg Research published a report accusing the Adani Group of engaging in fraudulent activities to artificially inflate its stock prices. The Group has strenuously denied these allegations with a detailed rebuttal.

Following the release of the report, public interest litigations (PILs) were filed by various advocates and activists, prompting the Supreme Court to form an investigation committee in March, chaired by former justice A.M. Sapre and comprising members such as O.P. Bhat, justice J.P. Devadhar, K.V. Kamath, Nandan Nilekani, and Somasekharan Sundaresan.

In May, the top court had granted Sebi additional time till 14 August to conclude its investigation after it failed to meet the original two-month deadline.

On Friday, solicitor general Tushar Mehta said Sebi has mulling further investigations based on newly received information in the matter.

The Supreme Court warned Sebi about the potential market volatility caused by short-selling but dismissed the petitioners' claim that the markets regulator's investigation was inadequate. The court maintained that an investigation cannot be initiated solely on the basis of media reports.

Chief justice Chandrachud raised questions about market volatility and Sebi's regulatory measures to safeguard investors, despite expressing reservations about undermining Sebi's credibility and the impartiality of the expert committee.

The court also refused to acknowledge the Hindenburg report as evidence and denied a request for a probe into the country's major financial institutions. 

Senior lawyer Prashant Bhushan criticized Sebi for its handling of previous issues involving the Adani Group, dating back to 2014, but solicitor general Mehta countered by referencing a 2017 DRI investigation that found no evidence against Adani.

Bhushan also highlighted a potential conflict of interest concerning Sundarasan's appointment to the expert committee and his recent judicial appointment.

“Let’s be fair. He was appearing as a lawyer. You’re pointing out a conflict of interest because he appeared for Adani in 2006? There has to be a sense of responsibility,” the chief justice said.

Bhushan also mentioned the Organized Crime and Corruption Reporting Project (OCCRP) report on Adani. 

To which, Mehta said, “We wrote to OCCRP asking for details. They asked us to get details from Prashant Bhushan. He gets a report prepared and then appears in the same case. Did not say this earlier because it would be embarrassing for Bhushan.”