The Supreme Court inquired about the status of the ongoing investigation by the Securities and Exchange Board of India (SEBI) into allegations of stock price manipulation by the Adani group on Tuesday. The court emphasized the need for the investigation to be concluded by the extended deadline of August 14.
Solicitor General Tushar Mehta, representing SEBI, informed the bench that the investigation is progressing at a reasonable pace in response to the court’s request for an update on the matter.
Mehta also mentioned that SEBI had submitted a “constructive response” to the suggestions made by the court-appointed expert committee in their report, which was filed in the court on Monday.
The court questioned the status of SEBI’s investigation, reminding Mehta that the deadline for completion had been extended by the apex court until August 14. This extension was granted on May 17, and the court requested an updated status report on the probe from the market regulator.
During the hearing, Mehta highlighted that SEBI has provided a detailed response regarding its functioning, separate from the allegations of stock price manipulation by the Adani group. He requested the court to review SEBI’s response.
Advocate Prashant Bhushan, representing one of the petitioners, pointed out discrepancies between the conclusions of the expert committee’s report and the facts found during the investigation. He raised concerns about SEBI’s regulatory failure and its ability to proceed with the investigation.
The court noted that SEBI has submitted a response to the expert committee’s report and requested that the response be circulated and placed on record before further proceedings.
The court addressed the issue of cooperation with the expert committee, refuting claims that agencies were not cooperating and emphasizing the need for all agencies to work with the committee.
The bench adjourned the hearing and requested SEBI to circulate its response, which includes the regulator’s views on the expert committee’s recommendations. The court indicated that the matter will be taken up for immediate hearing after concluding other scheduled pleas before a constitution bench.
SEBI filed an application on Monday stating that its 2019 rule changes do not hinder the identification of beneficiaries of offshore funds, and it will take action if any violations are found. The regulator emphasized its continuous efforts to tighten rules related to beneficial ownership and related-party transactions.
A Supreme Court-appointed expert committee’s interim report in May found no regulatory failure in billionaire Gautam Adani’s companies but highlighted amendments made by SEBI between 2014-2019 that limited the regulator’s investigative ability. The committee’s probe into alleged violations in money flows from offshore entities yielded no results.
The apex court directed that copies of the expert committee’s report be made available to the parties involved to assist in further deliberations on the matter.
Following allegations and a litany of accusations against the Adani Group by Hindenburg Research, the conglomerate’s stocks were negatively impacted on the stock exchange. The Adani Group refuted the charges, asserting its compliance with all laws and disclosure requirements.
