SEBI Seeks 15 Days Extension to Submit Report in Adani-Hindenburg Case

The Securities and Exchange Board of India (SEBI) has requested the Supreme Court for an additional 15 days to complete its probe into the Adani-Hindenburg matter.

In a legal filing, SEBI said it has completed investigations into 17 transactions done by the Adani Group out of the 24 taken up for the probe.

The markets regulator said it has sought more information from other regulators and foreign jurisdictions for further course of action. It also said that out of the remaining six matters, findings have been "crystalized" in four investigations.

The Supreme Court had set a deadline of August 14 for SEBI to conclude the probe and submit its report, with the next hearing scheduled for August 29.

SEBI's investigation is broadly related to whether the Adani Group manipulated share prices by exploiting gaps in the minimum public shareholding (MPS) norms, and whether it failed to disclose related-party transactions.

It may be noted that the allegations of related-party transactions and exploitation of MPS were key aspects highlighted by Hindenburg in its report in January.

However, SEBI's investigation into MPS-related matters encountered multiple roadblocks due to the complexity of the overseas transactions involved. This was because overseas jurisdictions were not fully cooperative in sharing details of foreign portfolio investors (FPIs) holding Adani Group stocks.

Meanwhile, shares of all Adani Group companies fell sharply on Monday, after Deloitte resigned as the auditor of Adani Ports & SEZ.

Progress and Investigations Underway

In its legal submission, SEBI disclosed that it has made substantial progress in the case, having completed examinations of 17 transactions within the Adani Group out of the 24 initially taken up for scrutiny. The regulatory body has undertaken diligent efforts to ascertain the veracity of the allegations surrounding the Adani-Hindenburg issue.

Seeking Collaborative Inputs for Comprehensive Action

SEBI's approach has been one of meticulousness, as it has sought additional information from both other regulatory authorities and foreign jurisdictions. These inputs are crucial for SEBI's ability to chart its course of action accurately.

The regulatory authority has already solidified its findings in four of the six remaining matters under investigation.

Delays and Further Investigation

Initially, SEBI was reported to have prepared its final report pertaining to the allegations made by US short-seller Hindenburg Research against the Adani Group. However, due to the complexities encountered during the investigative process, the regulatory body has requested the extension. This decision aligns with SEBI's commitment to ensuring a comprehensive and well-informed report.

The Supreme Court's Deadline and Key Aspects of the Probe

The Supreme Court of India had initially set a deadline of August 14 for SEBI to finalize its investigation and present its findings to the court. The investigation revolves around two significant aspects: first, whether the Adani Group engaged in manipulative practices to influence share prices through gaps in the minimum public shareholding (MPS) norms, and second, whether it failed to adequately disclose related-party transactions.

Hindenburg's Allegations and Overseas Challenges

The allegations raised by Hindenburg Research, particularly concerning related-party transactions and potential manipulation of MPS regulations, prompted SEBI's intervention. However, the investigation faced hurdles due to the complexity of overseas transactions, as foreign jurisdictions did not readily cooperate in sharing details of foreign portfolio investors (FPIs) holding Adani Group stocks.

Market Reaction and Recent Developments

Interestingly, the news of SEBI's extension request coincided with a significant market reaction. The shares of various Adani Group companies witnessed a notable decline following the announcement of Deloitte's resignation as the auditor of Adani Ports & SEZ. These developments add layers of complexity to the overall landscape surrounding the Adani-Hindenburg case.

Some relevant and latest facts about the above news:

• SEBI is investigating whether the Adani Group manipulated share prices by exploiting gaps in the minimum public shareholding (MPS) norms, and whether it failed to disclose related-party transactions.

• The Supreme Court had set a deadline of August 14 for SEBI to conclude the probe and submit its report, with the next hearing scheduled for August 29.

• SEBI has completed investigations into 17 transactions done by the Adani Group out of the 24 taken up for the probe.

• SEBI has sought more information from other regulators and foreign jurisdictions for further course of action.

• Out of the remaining six matters, findings have been "crystalized" in four investigations.

• Deloitte resigned as the auditor of Adani Ports & SEZ on Monday, citing concerns over the company's disclosures.

• Shares of all Adani Group companies fell sharply on Monday after Deloitte resigned as the auditor of Adani Ports & SEZ.

These are just some of the latest facts about the Adani-Hindenburg case. It is a complex and evolving situation, and more information is likely to come to light in the coming weeks and months.