Adani-Hindenburg case: Supreme Court to hear Sebi's plea on extension of probe time on July 10

The Supreme Court on Monday adjourned the hearing on the Securities and Exchange Board of India’s (Sebi) plea to July 10 seeking a six-month extension to complete a probe into allegations of stock price manipulation by the Adani group.

The hearing on Sebi’s plea and other PILs could not take place on May 16 due to paucity of time as the Monday hearing was scheduled for certain matters.

Last week, a bench comprising Chief Justice D Y Chandrachud and Justice P S Narasimha and Justice J B Pardiwala had observed that it would consider granting a three-month extension to Sebi instead of six months to complete its probe into the allegations of stock price manipulation and lapses in regulatory disclosure leveled by US-based short seller Hindenburg Research.

Sebi has already filed a rejoinder affidavit giving additional reasons for seeking more time to probe the issue.

“The application for extension of time filed by Sebi is meant to ensure carriage of justice keeping in mind the interest of investors and the securities market since any incorrect or premature conclusion of the case arrived at without full facts material on record would not serve the ends of justice and hence would be legally untenable,” it said.

Market regulator Sebi was supposed to file the report by May 2 but on April 29, it submitted a fresh application seeking a six-month extension for a thorough investigation into the allegations of stock manipulation and financial fraud against Adani Group.

On April 29, Sebi filed its request with the apex court and highlighted complex transactions involving listed, unlisted, and offshore entities that require deeper investigations.

In its application to SC, Sebi said that given the complexity of the case, it would take around 15 months to complete the investigation. But it is trying to conclude the investigation within six months.

“To ascertain possible violations related to misrepresentation of financials, circumvention of Regulations, and investigate the fraudulent nature of transactions mentioned in the Hindenburg report, it would take in the normal course at least 15 months,” said Sebi in its application.

On March 2, the SC had asked Sebi to probe within two months the allegations against the Adani group and 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 $140 billion of the Indian conglomerate's market value.

It had also ordered the setting up of a six-member committee headed by former apex court judge Justice A M Sapre to investigate the issue.

The committee also includes retired judge Justice J P Devadhar, OP Bhatt, KV Kamath, Nandan Nilekani, and Somashekhar Sundaresan.

The Sapre panel is expected to provide an overall assessment of the situation, including the relevant causal factors which have led to volatility in the securities market in the recent past.

(With agency inputs)

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