Adani-Hindenburg Row: SEBI moves SC seeking direction for six more months to complete probe

SEBI also said that it needed more time as the investigation is complex and requires additional time to ensure that all aspects of the allegations are thoroughly examined.

There are 12 suspicious transactions for possible violations related to misrepresentation of financials, and fraudulent nature of transactions, the SEBI said in its petition filed before the Supreme Court, which is expected to hear the Adani-Hindenburg issue on the first week of May.

SEBI in its plea to the Supreme Court said that its preliminary investigation on several possible violations by the Adani Group includes misrepresentation of financials, fraudulent transactions, disclosure norms, corporate governance norms, minimum public shareholding norms, and stock price manipulation.

The stock market watchdog also said that it arrived at a prima facie view based on trading in Adani stocks before and after the Hindenburg report, including possible violations of foreign portfolio investment (FPI) norms, overseas direct investment (ODI) norms, insider trading regulations, and norms on short selling.

SEBI's deadline to submit the status report to the Supreme Court is May 2, the SC had said in its March 2 order, which also asked it (SEBI) to “expeditiously conclude” the investigation within two months and file a status report.

Supreme Court had said it was constituting a committee into the Adani-Hindenburg issue and it will be supervised by a SC-appointed 5-member panel, including O P Bhat, Justice JP Devdhar, K V Kamat, Nandan Nilekani and Somasekhar Sundaresan and the committee will be headed by Justice (Retired) Abhay M Sapre.

The Supreme Court had also said that the committee should submit its report in a sealed cover.

A three-judge bench of the Supreme Court, headed by the Chief Justice of India (CJI) Dr Dhananjaya Yeshwant Chadrachud and also comprising Justices P S Narasimha and J B Pardiwa, who had reserved its verdict on February 17 on the constitution of a committee, pronounced the judgment on March 2.

The Supreme Court had heard a number of petitions filed by lawyer duo -- Manohar Lal Sharma and Vishal Tiwari -- Congress leader and Member of Parliament (MP) Dr Jaya Thakur, seeking a direction for investigation against Adani Group in the light of the Hindenburg report.

"The decline in share prices was precipitated by a report by Hindenburg Research. The report alleges that the Adani group manipulated and violated security laws," the apex court had noted in its judgment.

"As a part of the SEBI probe, it shall also probe if rule 19 of security contract regulation rules were violated and if there was any manipulation of stock prices," the Supreme Court had said.

The top court had also noted that there was a need to review existing regulatory mechanisms to protect Indian investors from market volatility.

(With UNI inputs)