SEBI's Progress in Adani-Hindenburg Probe: Challenges and ongoing investigations

SEBI updates on Adani-Hindenburg investigation: progress and challenges

The Securities and Exchange Board of India (SEBI) has provided a recent update on its ongoing investigations into the Adani-Hindenburg matter. In an affidavit submitted to the Supreme Court, SEBI outlined the progress it has made and the challenges it faces in this complex case that revolves around allegations related to the Adani Group.

Sebi has conducted a total of 24 investigations regarding the Adani-Hindenburg matter. Encouragingly, 22 of these investigations have been completed, while the remaining 2 are still in interim stages. Currently, the regulatory body is awaiting responses from external agencies that are connected to the two ongoing probes, signifying a thorough and comprehensive approach to the investigation.

Global focus: International entities and Foreign Portfolio Investors

During the initial phase of the inquiry, SEBI's attention was directed toward examining 13 international entities linked to the Adani Group's enterprises. In a bid to gain a holistic understanding, SEBI has also initiated inquiries involving five nations in connection with Foreign Portfolio Investors (FPIs). This comprehensive approach reflects Sebi's commitment to investigating all relevant aspects of the case, even on an international scale.

A noteworthy challenge in this investigation arises from the fact that several of these entities are based in tax havens. Determining the economic interests of shareholders among the 12 Foreign Portfolio Investors (FPIs) has proven to be a complex task, compounded by the intricacies of tax jurisdictions. SEBI acknowledges that this particular aspect presents difficulties in establishing a clear picture of the financial landscape surrounding the Adani Group.

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Recognizing the complexity of the investigation and its significance, SEBI requested a 15-day extension from the Supreme Court to conclude its inquiries. The purpose of this extension is to ensure a thorough examination and to submit a comprehensive status report on the Hindenburg report's implications for the Adani group. This proactive approach demonstrates SEBI's dedication to presenting a well-founded and comprehensive assessment of the matter.

It's important to note that the Supreme Court had set an original deadline of August 14 for Sebi to conclude its investigation and submit a report. The upcoming hearing on August 29 will provide an opportunity for the regulatory body to present its findings and insights before the judiciary.

Focus of SEBI's inquiry

At the heart of SEBI's investigation lies a two-fold focus. The regulatory body is diligently probing whether the Adani Group engaged in manipulation of share prices by exploiting gaps in the minimum public shareholding (MPS) regulations. Additionally, SEBI is investigating whether the group failed to disclose transactions involving related parties, an aspect that holds crucial implications for transparency and regulatory adherence.

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