SEBI’s affidavit contradicts the Finance Ministry’s reply to Parliament
On Monday, the Securities and Exchange Board of India (SEBI) told the Supreme Court that it has not been probing any companies of the Adani Group since 2016, as was earlier contended. The market regulator’s affidavit is totally in stark contradiction to the Finance Ministry’s reply in 2021 in Parliament that SEBI and DRI had probed the companies of Adani Group. The SEBI sought additional time to investigate the dealings of the conglomerate, reasoning that they were “highly complex”.
Minister of State for Finance Pankaj Chaudhary, in reply to TMC MP Mahua Moitra, said in Lok Sabha on July 19, 2021, that the DRI and SEBI are probing some entities of the Adani group about compliance with the SEBI regulations. SEBI’s affidavit to Monday to the apex court of the country clearly contradicts the Finance Ministry’s reply to Parliament. Here the question hangs fire is who is correct? SEBI or Finance Ministry on the probe on Adani Group companies?
Later in the evening, Finance Ministry tweeted: “The Government stands by its reply in Lok Sabha on 19th July 2021 to Q. No. 72, which was based on due diligence and inputs from all concerned agencies,” With this statement from Finance Ministry, SEBI is in deep trouble on its latest affidavit to Supreme Court by saying that they had not probed Adani Group from 2016.
The Government stands by its reply in Lok Sabha on 19th July 2021 to Q. No. 72, which was based on due diligence and inputs from all concerned agencies. https://t.co/JGZHXT6kqM
— Ministry of Finance (@FinMinIndia) May 15, 2023
The affidavit filed before a Bench of Chief Justice of India (CJI) DY Chandrachud and Justices P S Narasimha and J B Pardiwala states that allegations that SEBI has been investigating Adani Group companies since 2016 is factually baseless. The apex court is scheduled to hear SEBI’s demand on Tuesday.
The Supreme Court is seized of four petitions concerning the recent report published by short-seller Hindenburg Research alleging fraud on the part of the conglomerate by inflating share prices. The Hindenburg report had led to a fall in the share value of various Adani companies, reportedly to the tune of $100 billion.
“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,” the affidavit reads.
According to the SEBI, an investigation relating to the twelve transactions referred to in the Hindenburg Report had many sub-transactions across numerous jurisdictions. It adds that a rigorous investigation of these transactions would require the collation of data from various sources along with supporting documents. Following this, an analysis would be conducted before conclusive findings can be arrived at.
SEBI sought an extension of six months.
The Court had on Friday expressed its inclination to grant only three more months to SEBI to complete its probe into the controversy surrounding the Hindenburg Research report on the Adani Group of companies and allegations against the conglomerate.
In an order passed on March 2, the Supreme Court allowed SEBI to continue with its probe. The probe was to be completed by May 2. This probe is in addition to the investigation ordered by the top court by an expert committee headed by former judge Justice A M Sapre.
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