The Securities and Exchange Board of India differed the recommendations of Supreme Court Committee and said in an affidavit that, ‘it is not difficult to find out any indiscrepancies or to identify the beneficiaries of offshore fund in alleged Adani Case. Although SEBI maintained that it has tightened the rules concerning beneficial ownership and related companies transactions.
A bench headed by Chief Justice D Y Chandrachud is scheduled to hear the ongoing Adani-Hindenburg case on Tuesday.
Capital markets regulator SEBI on Monday told the Supreme Court that 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.
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.
However, it cited several amendments the Securities and Exchange Board of India (SEBI) made between 2014-2019 that constrained regulators’ ability to investigate, and its probe into alleged violation in money flows from offshore entities has “drawn a blank”.
SEBI in its latest affidavit to the Supreme Court said it did not agree with the expert committee observation of difficulties in identifying holders of economic interest behind an offshore fund.
It also differed with the panel observation that stocks will re-price if the markets feel actions taken in the past by the company were not desirable, saying even if the market may re-price the stocks of the company based on the past transactions, “there is no bar on SEBI to examine any securities laws violations because re-pricing of the stock has happened.”.
SEBI indicated it does not agree with the expert committee’s views and action will be taken if any violation is found or established.
The Supreme Court Committee was to work in parallel with the probe by Sebi into offshore entities investing in the Adani Group. The regulator was first asked to complete the probe in two months and then given another three months till August 14.
