The Securities and Exchange Board of India (SEBI) on Monday submitted a rejoinder affidavit in the Supreme Court, citing fresh reasons for requesting more time to investigate the Adani-Hindenburg matter.
“The application for extension of time filed by SEBI is meant to ensure carriage of justice while keeping investors and the securities market in mind, because any incorrect or premature conclusion of the case reached without full facts material on record would not serve the ends of justice and thus would be legally untenable,” it stated.
Last week, while hearing SEBI’s application for a six-month extension to complete the investigation, a bench comprised of Chief Justice DY Chandrachud, Justices PS Narasimha and JB Pardiwala suggested that it could not give more than three months to complete the process. The two-month period originally granted by the Supreme Court in its March 2 order expired on the day of the last hearing, May 2.
During the hearing, the bench highlighted that the SEBI’s position had been that it had begun investigating the subject long before the court’s orders. Tushar Mehta, Solicitor-General of India, representing the regulatory body, stated that due to the intricacies of the case, at least six months would be required.
“At least 15 months are required, but the SEBI will make every effort to complete the investigation in six months,” the law officer informed the bench.
In a fresh affidavit filed today, the Securities and Exchange Board has sought to substantiate its plea by highlighting the complexity of the transactions referred to in the controversial report.
It stated, “In regard to the investigation or examination relating to the 12 transactions referred to in the Hindenburg Report, it is noted that these transactions are highly complex and have many sub-transactions across numerous jurisdictions, and a rigorous investigation of these transactions would require collation of data or information from various sources including bank statements from multiple domestic as well as international banks, financial statements of onshore and offshore entities, and financial statements of onshore and offshore entities. Following it, study of the papers collected from multiple sources would be required before conclusive conclusions could be reached.”
Aside from that, the securities board has dismissed the petitioner’s claim that it has been examining Adani since 2016. According to reports, the inquiry focused on the issuing of Global Depository Receipts by 51 Indian listed firms, none of which were part of the Adani Group.
According to the affidavit, “The allegation that the Securities and Exchange Board of India has been investigating Adani since 2016 is factually baseless. The confidence sought to be placed on the GDR investigation is completely misguided.”
According to SEBI, no Adani Group listed firm was among the aforementioned 51. It may be recalled that during the previous week’s session, Advocate Prashant Bhushan argued that while SEBI has acknowledged to probing Adani transactions since 2017, their request for further time is not acceptable.
Finally, SEBI has informed the Supreme Court that it has already approached eleven overseas regulators in accordance with the Multilateral Memorandum of Understanding (MMOU) with the International Organisation of Securities Commissions (IOSCO) regarding its investigation into Minimum Public Shareholding (MPS) norms.
“These regulators received a number of requests for information. The initial request to foreign regulators was submitted on October 6, 2020. A complete note summarising the measures performed, responses received, and the present status of information collecting under the MMOU of IOSCO has been submitted to the expert committee formed by this court,” it stated.
