The market regulator argued that because the 12 suspicious transactions listed in the Hindenburg report are intricate and have numerous sub-transactions, a thorough investigation is required.
In its application to the Supreme Court on Saturday, the Securities and Exchange Board of India (SEBI) requested an additional six months to finish its investigation into the controversy surrounding the Hindenburg Research report on the Adani Group of Companies and allegations against the Conglomerate [Vishal Tiwari v. Union of India and ors].
IIn a ruling issued on March 2, the Supreme Court had given SEBI permission to carry on with its investigation. he probe was to be completed by May 2.
This investigation was conducted in addition to the investigation that the Supreme Court’s expert committee, led by retired judge AM Sapre, ordered.
In its application, SEBI stated that the investigation would take an additional six months to complete.
According to SEBI, it has informed the expert committee of the status, actions taken, and preliminary findings pertaining to the examinations and investigations it has conducted.
The market regulator argued in its application that the 12 suspicious transactions listed in the Hindenburg report would require a thorough investigation lasting at least 15 months due to their complexity and the number of sub-transactions they contain.
Additionally, since the bank statements would be for transactions that were completed more than ten years ago, obtaining them from various domestic and international banks would be necessary for the investigation. This would be difficult and time-consuming.
It was stated that requesting bank statements from offshore banks would require assistance from offshore regulators, which could take time and be difficult.
However, the SEBI stated that it would attempt to complete the same in six months and requested a six-month extension.
“Applicant/SEBI also respectfully submits that given the complexity of the situation, SEBI in the normal course would take at least 15 months to complete the investigation of these transactions, but is making all reasonable efforts to conclude the same, in order to ascertain any potential violations related to misrepresenting financials, evading regulations, and/or fraudulent nature of transactions in respect of the 12 suspicious transactions mentioned above.
The transactions for which additional time would be needed would be divided into the following three categories:
(i) Cases in which there have been prima facie violations discovered, and a period of six months must pass before a conclusive finding can be made.
(ii) In cases where prima facie violations have not been discovered, revalidating the analysis and reaching a conclusive conclusion would take six months.
(iii) In cases where, further examination/investigation is required and most of the data that is required for this purpose is expected to be reasonably accessible, a conclusive finding is expected to be arrived at in 6 months.
In four petitions, the conglomerate is accused of defrauding investors by artificially inflating share prices, according to a recent report by short-seller Hindenburg Research.
The Adani Group reportedly suffered losses totaling $100 billion as a result of the report, which caused the share values of several Adani companies to decline.
In his petition to the Supreme Court, attorney Manohar Lal Sharma requested that the SEBI and the Union Home Ministry be directed to launch an investigation and file a First Information Report (FIR) against Nathan Anderson, the founder of Hindenburg Research, and his associates in India.
In the second petition on the subject, attorney Vishal Tiwari demanded that a committee led by a former judge of the Supreme Court conduct an investigation into the Hindenburg report.
In addition to calling for the prosecution of the Adani group of companies, Congress leader Dr. Jaya Thakur’s petition has called into question the decisions of the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to purchase shares of the company at allegedly inflated prices.
Written By- Tushar Vashisth students of 3rd year BBA LLB at Chandigarh University
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