Adani-Hindenburg row: SC hints at 3-month extension to SEBI to complete probe, next hearing on Monday
Adani-Hindenburg row: 'Six-month extension would be too much, there has to be some alacrity,' SC tells SEBI
- May 12, 2023,
- Updated May 12, 2023 11:49 PM IST
The Supreme Court on Friday indicated it may give market regulator SEBI a three-month extension to complete its probe in the Adani-Hindenburg row by August 14 and listed a batch of PILs and plea by the market regulator on May 15. On May 15, the apex court will also hear an application by SEBI seeking extension of time to complete the probe into alleged stock price manipulation by the Adani Group. SEBI is looking into the allegations of stock price manipulation by the Adani Group and lapses in regulatory disclosure.
A bench of Chief Justices DY Chandrachud and Justices PS Narasimha and JB Pardiwala said the court registry has received the report of the apex court-appointed Justice (retd) AM Sapre committee on the issue and would like to hear the matter on Monday after perusing the findings of the panel. "We will go through the report in the meantime. We will take up the matter on May 15," the bench said.
Solicitor General Tushar Mehta told the apex court on Friday that suspicious transactions need to be probed and that SEBI needed six months more to reach to a conclusion.
The Securities and Exchange Board of India (SEBI), in a petition filed on April 29, had sought six months to complete its probe. "Considering that many contours are outside the jurisdiction, we need a minimum of 6 months," said Mehta appearing for SEBI. "Six-month extension would be too much, there has to be some alacrity," the apex court told SEBI.
Cautioning a lawyer, appearing for petitioner Jaya Thakur, it said the court has said nothing about any regulatory failure on the part of SEBI.
''Be careful when you make allegations. This may affect the sentiments in the stock market. It's all your allegations and the panel has been formed to look into it,'' the bench said.
Advocate Prashant Bhushan, who represented petitioner Anamika Jaiswal, said SEBI should tell the court what it has done so far in its investigation on the complaint about the shell companies registered in Mauritius since 2016. The bench told Bhushan, ''Suppose they (SEBI) were to tell us what they have so far learnt in the investigation. Then to ask them to disclose would affect the investigation. Then for us to look at that…This is not some criminal investigation that we are looking at the case diary. It will not be proper at this stage.'' CJI Chandrachud said the court will not give SEBI indefinite time and accord it three months to conclude investigation in the Adani-Hindenburg controversy. Solicitor General Tushar Mehta, appearing for SEBI, said the petitioners have confused the issue and what the market regulator was already investigating was totally different.
''What they are saying about the complaint is totally unconnected to this matter. We have approached international agencies and I have taken instructions from SEBI's highest administrative level. Six months are also a compressed period and I am saying this with a certain sense of responsibility. I must not say something which we also know is not achievable, which is not in our control,'' he said.
Mehta said SEBI needs bank statements of transactions, both domestic and international, and has sought assistance of offshore regulators which is a time consuming and challenging process. ''For that we need six months' time, which is already a compressed time period. We have already approached the offshore regulators and they have to collect the bank statements and transaction details and give them to us,'' the law officer said. The bench told Mehta it gave two months to the Justice Sapre committee and two months to SEBI to complete their investigation. ''Now, our original remit was two months and to extend it to six months will not be appropriate. What we will do is give you time of three months, because there is a point which they (petitioners) are making that SEBI was in possession of the complaint which it was investigating,'' the court said.
The apex court had on March 2 asked SEBI to probe within two months these allegations and had also set up a panel to look at providing protection to Indian investors after a damning report by US short seller Hindenburg wiped out more than USD 140 billion of the Indian conglomerate's market value.
Recently, SEBI moved the apex court and submitted it needs six more months for ascertaining possible violations related to ''misrepresentation of financials, circumvention of regulations and/or fraudulent nature of transactions''.
On February 10, the top court had said the interest of Indian investors needs to be protected against market volatility in the backdrop of the rout of the Adani Group stocks and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look at strengthening the regulatory mechanism. The Centre had agreed to the apex court's proposal.
Till now, four PILs have been filed in the top court on the issue including by lawyers M L Sharma and Vishal Tiwari and Congress leader Jaya Thakur.
Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.
The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
The Supreme Court on Friday indicated it may give market regulator SEBI a three-month extension to complete its probe in the Adani-Hindenburg row by August 14 and listed a batch of PILs and plea by the market regulator on May 15. On May 15, the apex court will also hear an application by SEBI seeking extension of time to complete the probe into alleged stock price manipulation by the Adani Group. SEBI is looking into the allegations of stock price manipulation by the Adani Group and lapses in regulatory disclosure.
A bench of Chief Justices DY Chandrachud and Justices PS Narasimha and JB Pardiwala said the court registry has received the report of the apex court-appointed Justice (retd) AM Sapre committee on the issue and would like to hear the matter on Monday after perusing the findings of the panel. "We will go through the report in the meantime. We will take up the matter on May 15," the bench said.
Solicitor General Tushar Mehta told the apex court on Friday that suspicious transactions need to be probed and that SEBI needed six months more to reach to a conclusion.
The Securities and Exchange Board of India (SEBI), in a petition filed on April 29, had sought six months to complete its probe. "Considering that many contours are outside the jurisdiction, we need a minimum of 6 months," said Mehta appearing for SEBI. "Six-month extension would be too much, there has to be some alacrity," the apex court told SEBI.
Cautioning a lawyer, appearing for petitioner Jaya Thakur, it said the court has said nothing about any regulatory failure on the part of SEBI.
''Be careful when you make allegations. This may affect the sentiments in the stock market. It's all your allegations and the panel has been formed to look into it,'' the bench said.
Advocate Prashant Bhushan, who represented petitioner Anamika Jaiswal, said SEBI should tell the court what it has done so far in its investigation on the complaint about the shell companies registered in Mauritius since 2016. The bench told Bhushan, ''Suppose they (SEBI) were to tell us what they have so far learnt in the investigation. Then to ask them to disclose would affect the investigation. Then for us to look at that…This is not some criminal investigation that we are looking at the case diary. It will not be proper at this stage.'' CJI Chandrachud said the court will not give SEBI indefinite time and accord it three months to conclude investigation in the Adani-Hindenburg controversy. Solicitor General Tushar Mehta, appearing for SEBI, said the petitioners have confused the issue and what the market regulator was already investigating was totally different.
''What they are saying about the complaint is totally unconnected to this matter. We have approached international agencies and I have taken instructions from SEBI's highest administrative level. Six months are also a compressed period and I am saying this with a certain sense of responsibility. I must not say something which we also know is not achievable, which is not in our control,'' he said.
Mehta said SEBI needs bank statements of transactions, both domestic and international, and has sought assistance of offshore regulators which is a time consuming and challenging process. ''For that we need six months' time, which is already a compressed time period. We have already approached the offshore regulators and they have to collect the bank statements and transaction details and give them to us,'' the law officer said. The bench told Mehta it gave two months to the Justice Sapre committee and two months to SEBI to complete their investigation. ''Now, our original remit was two months and to extend it to six months will not be appropriate. What we will do is give you time of three months, because there is a point which they (petitioners) are making that SEBI was in possession of the complaint which it was investigating,'' the court said.
The apex court had on March 2 asked SEBI to probe within two months these allegations and had also set up a panel to look at providing protection to Indian investors after a damning report by US short seller Hindenburg wiped out more than USD 140 billion of the Indian conglomerate's market value.
Recently, SEBI moved the apex court and submitted it needs six more months for ascertaining possible violations related to ''misrepresentation of financials, circumvention of regulations and/or fraudulent nature of transactions''.
On February 10, the top court had said the interest of Indian investors needs to be protected against market volatility in the backdrop of the rout of the Adani Group stocks and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look at strengthening the regulatory mechanism. The Centre had agreed to the apex court's proposal.
Till now, four PILs have been filed in the top court on the issue including by lawyers M L Sharma and Vishal Tiwari and Congress leader Jaya Thakur.
Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.
The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.