The Supreme Court on Tuesday adjourned the hearing on a batch of pleas on the Adani-Hindenburg row and asked the Securities and Exchange Board of India (SEBI) to circulate its response to the recommendations made by the apex court-appointed expert committee.
Solicitor General Tushar Mehta, appearing for SEBI, told the top court they had on Monday filed their “constructive response” on the suggestions made by the expert committee in its report filed in the court.
“What is the status of the investigation?” asked a bench comprising Chief Justice D Y Chandrachud and Justices P S Narasimha and Manoj Misra.
Mehta said the apex court had in May granted the capital markets regulator time till August 14 to complete its probe into the allegations of stock price manipulation by the Adani group and the investigation in the matter is going on.
“The expert committee have made certain recommendations. We have filed our response. It has nothing to do with the allegations,” he said.
The bench said it has not received the SEBI’s response and it would be appropriate if it is circulated with the other papers connected to the case.
It said the matter will be taken up for hearing immediately after the conclusion of the hearing on some other pleas that are listed before a constitution bench, which is scheduled to commence the hearing from Wednesday.
SEBI had, in its application filed on Monday in the apex court, said that it did not agree with the expert committee observation of difficulties in identifying holders of economic interest behind an offshore fund.
Without making any mention of the status report of its own investigation into allegations against Adani Group, SEBI said its 2019 rule changes do not make it tougher to identify beneficiaries of offshore funds, and action will be taken if any violation is found or established.
The markets regulator said it has continuously tightened rules concerning beneficial ownership and related-party transactions – key aspects in the allegations of Adani Group manipulating its stock price.
A Supreme Court-appointed expert committee had in an interim report in May stated that it saw “no evident pattern of manipulation” in billionaire Gautam Adani’s companies and there was no regulatory failure.
It, however, cited several amendments the SEBI made between 2014-2019 that constrained the regulator’s ability to investigate, and its probe into alleged violation in money flows from offshore entities has “drawn a blank”.
On May 17, the apex court had directed that copies of the report submitted before it by the top court-appointed Justice (retd) A M Sapre expert committee be made available to the parties to enable them to assist it in further deliberations in the matter.
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 dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
