Adani-Hindenburg case: Next hearing in Supreme Court on 13 October

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The next hearing of the Adani-Hindemburg case will take place in the Supreme Court on 13 October, according to a report by Business Today. The apex court is scheduled to take up the fresh status report filed by market regulator Sebi next month.

This week a PIL in the Adani-Hindenburg row accused SEBI of suppressing important facts from the Supreme Court and hiding the Directorate of Revenue Intelligence’s (DRI) letter on alleged stock manipulation by the Adani firms.

On 25 August, market regulator Sebi informed the Supreme Court that it had completed the probe in all but two allegations against the Adani Group, and is still awaiting information from five tax havens on the actual owners behind the foreign entities that have invested in the conglomerate.

However, Anamika Jaiswal, one of the four petitioners said while the investigation against the Adani group was going on in the over-invoicing case, the Directorate of Revenue Intelligence (DRI) sent a letter to the then SEBI chairperson in 2014 alerting him that the group may be committing stock market manipulation using the money allegedly siphoned off using the modus operandi of over-valuation in the import of power equipment.

The petitioner accused Sebi of suppressing important facts from the court and sleeping over DRI alerts.

“Mr Cyril Shroff Managing Partner, Cyril Amarchand Mangaldas has been a member of SEBI’s Committee on Corporate Governance, which looks at offences like insider trading,” the affidavit said, adding his daughter is married to Gautam Adani’s son.

The petitioner submitted that five out of the 24 SEBI investigation reports are on insider trading allegations against the Adani group companies.

Further, the petitioner cited documents, unearthed by a a journalist consortium ‘Organized Crime and Corruption Reporting Project’. The affidavit said two Mauritius-based companies- Emerging India Focus Fund (EIFF) and the EM Resurgent Fund (EMRF)- had invested and traded in a large volume of shares of four Adani companies between 2013 and 2018.

“The names of these two companies figure in SEBI’s list of 13 suspected Foreign Portfolio Investments /overseas entities but SEBI has been unable to trace their ultimate beneficial owners or economic interest shareholders,” the petitioner said in the affidavit.

The petitioner said frequent amendments brought in by SEBI to the regulations and definitions have benefitted Adani Group.

This year in January, US-based short seller Hindenburg Research alleged that Adani Group is involved in accounting fraud, stock price manipulation, and improper use of tax havens. The report triggered a stock market rout of the Adani group shares that erased close to $150 billion in market value at its lowest point.

Following this, the Supreme Court asked SEBI to look into the allegations and submit its findings. In March, a separate six-member expert panel was formed which included a retired judge and veteran bankers, to go into regulatory aspects of the allegations.

That panel said in May the SEBI has so far drawn a blank in its investigations and its ongoing pursuit of the case is a “journey without a destination”.

The apex court set August 14 as the deadline for SEBI to conclude its probe and submit the report. The regulator sought a 15-day extension to conclude the investigation. It has now submitted a status report on its probe.

On its part, the Adani group has rejected all allegations.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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