Adani row: ‘Does SEBI need help from investigative agencies to probe Mauritius funds,’ asks Raghuram Rajan

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Sunday said that it is a matter of concern that markets regulator Securities and Exchange Board of India (Sebi) has not investigated the Hindenburg charges into Adani Group operations.

Addressing the concerns around investigations in the Adani row, Rajan told PTI: "Why has Sebi not yet got to the bottom of the ownership of those Mauritius funds which have been holding and trading Adani stock? Does it need help from the investigative agencies?”

On what measures the government should take to improve oversight of private family companies to address worries after the Hindenburg allegations on Adani Group, Rajan said: “I don't think the issue is of more oversight over private companies.”

The issue is of reducing non-transparent links between government and business, and of letting, indeed encouraging, regulators do their job, he said.

The Supreme Court on Thursday formed a committee to investigate the Adani-Hindenburg issue. It also asked Sebi to investigate if the Adani group had violated the securities acts and rules and any manipulation in the Adani stocks. Chief Justice of India DY Chandrachud said the six-membered expert committee shall be headed by former Supreme Court judge Justice Abhay Manohar Sapre and include KV Kamath and Nandan Nilekani.

It also asked Sebi to suggest measures to strengthen investor awareness.

The apex court asked Sebi to investigate whether there has been a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies.

"To protect Indian investors against the volatility of the kind which has been witnessed in the recent past, we are of the view that it is appropriate to constitute an Expert Committee for the assessment of the extant regulatory framework and for making recommendations to strengthen it," CJI said in its order.

Also read: SC verdict on Adani-Hindenburg row: Adani group m-cap up Rs 23,400 crore, Adani Enterprises shares rally 14%

Last month, Sebi sought details of all ratings of local loans and securities of Adani group companies from credit rating firms.

The Sebi had asked the rating companies to share the information on Adani Group, which would include all outstanding ratings, outlook, and possible updates from any discussions with officials of the business group.

Sebi has been investigating the relationship between two Mauritius-based funds — The Great International Tusker Fund and Ayushmat Ltd — which participated in Adani Enterprises’ $2.4 billion follow-on public offer.

None of the rating companies in India has changed the ratings or outlook of Adani companies since January 24 when the Wall Street short seller Hindenburg Research released its report alleging price manipulation and accounting fraud by the group. Only international credit agencies, such as S&P and Moody's, have changed the 'outlook' on some of the Adani companies from 'stable' to 'negative', primarily due to the rapid decline in the market value of the companies concerned.

Adani Group stocks have been under pressure since January 24 after a Hindenburg report. In a bid to win back investors’ confidence, Adani Group is holding worldwide roadshows. The company will hold meetings with fixed-income investors from March 7 to 15 in Dubai, London, and the US, according to news reports.

Also read: Adani group stocks to buy: Adani Ports, Ambuja Cements shares have up to 35% upside potential, suggests ICICIdirect

Also read: Mega block deals of Adani stocks: US-based GQG Partners buys shares worth Rs 15,446 cr