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The Supreme Court on Wednesday granted a three-month extension until August 14 to the Securities and Exchange Board of India (Sebi) to submit its probe report in connection with the allegations made by American short-seller Hindenburg Research against the Adani group.
The apex court also directed Sebi to file an updated status report on the investigation that it had carried out so far.
On March 2 this year, the SC had ordered the formation of a six-member committee under retired Justice A M Sapre to probe the short-seller’s allegations against the group and asked the panel and the markets regulator to submit the investigation report by May 2.
But Sebi filed a plea seeking additional six months to complete the probe, citing the complexity of the case. The expert panel submitted its tentative report in the stipulated time frame. A Bench comprising Chief Justice of India (CJI) D Y Chandrachud, Justice P S Narasimha, and Justice J B Pardiwala said it cannot grant “indefinite extension”.
“We granted two months and now extended it until August which makes it five months. If you have any genuine issue, tell us then,” CJI Chandrachud told Solicitor General Tushar Mehta during the hearing of the matter. Mehta was representing the government and Sebi in the case.
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“We could have given you time until September 30… but on August 14, tell us which stage you are in. Give us an updated report on the status of the investigation,” the CJI said.
While noting the timely submission of the report by the Justice Sapre committee, the SC said the proceedings shall be listed after the summer recess on July 11 “in order to enable the court and counsel to analyse the report and reflect on the suggestions, which have been made by the committee.”
The Bench also directed that the committee’s report, which was submitted to it, be made available to the parties to enable them to assist the court in the matter. A six-member committee was constituted by the SC to suggest measures to strengthen the regulatory regime, following the Adani fiasco.
“The committee may hold further deliberations in the meantime. The panel would be requested to take up any further aspects or suggestions as may be formulated by the court, following the course of deliberations when the proceedings are next listed for hearing,” it stated.
On Monday, Sebi filed an affidavit in the apex court, saying that the allegations that it had been investigating the Adani group since 2016 were “factually baseless”.
During arguments on Wednesday, Mehta said the 2016 issue is something “totally different, distinct and separate”.
The Sebi counsel during the hearing cited its Monday affidavit and said the investigation done earlier by the regulator pertains to the issuance of global depository receipts (GDRs) by 51 Indian listed companies. It had submitted that no listed company of the Adani group was part of those 51 companies it was investigating.
“And even the statement in Parliament made in 2021 was with regard to a Sebi probe into some companies with compliance regulations… This probe had commenced in 2020 and the minister's statement is not for the probe originating in 2016,” Mehta explained.
The affidavit by the markets regulator stated that the July 19, 2021, reply by the finance ministry pertains to the investigation into Minimum Public Shareholding (“MPS”) norms.
Prashant Bhushan, who appeared on behalf of one of the petitioners, told the SC that in recent years, despite many complaints, the regulator didn't do anything. “If Adani’s (companies) shares increase abnormally by 5,000 per cent in a short span of one year, alarm bells have to be rung,” Bhushan said.
The lead petitioner in the case pointed out that the regulator has not yet informed the court of the members they've appointed for conducting the probe.
Sebi had told the apex court on February 13, in a submission, that it was “enquiring” into the allegations made by the American short-seller against the Adani group of companies and its impact on the markets.
