The Securities and Exchange Board of India (Sebi) in a fresh affidavit to the Supreme Court (SC) on Friday said that it has completed its investigation into the Adani Group. Sebi “shall take appropriate action based on outcome of the investigations,” it added.
The market regulator said that it has investigated 24 transactions involving the group’s listed firms and 22 of them are final. On the other two probes, it is awaiting inputs from external agencies.
Sebi has been investigating if there was a violation of rules concerning minimum public shareholding, related party transactions and manipulation of stock prices. It is also investigating the rout in Adani Group stocks following Hindenburg’s report.
The market regulator’s investigation was undertaken after a report by US short seller Hindenburg citing grave corporate concerns wiped out around $150 billion in the group’s market capitalisation within a month. That is, the market capitalisation of the group stood at $235 billion which crashed to $82 billion between January and February end.
The group’s fortunes changed after Australia-based GQG Partners – a global boutique asset management firm with asset under management of over $100 billion – started buying into the group’s stocks. On Friday, the group’s market capitalisation stood at $131 billion.
Hindenburg, on January 24, had alleged that the Adani group was involved in brazen stock manipulation and accounting fraud.
The group has denied the allegations.
Following this, the SC asked the market regulator to look into the allegations and submit its findings to a six-member panel formed in March, which included a retired judge and veteran bankers.
The SC-appointed expert committee had said in an interim report that it had found “no evident pattern of manipulation” and there was no regulatory failure.
However, it had also said that several amendments the Sebi made between 2014 and 2019 constrained the regulator’s ability to investigate, and its probe into alleged violation in money flows from offshore entities has “drawn a blank”.
Sebi refuted these charges by saying that the amendments in the rules in 2018 did away with the requirement of old guidelines.
After seeking an extension of six months initially, which was denied by the SC, on August 14, Sebi had filed an application with the SC seeking 15 more days to submit probe report, saying that it has completed investigating 17 out of the 24 transactions it had taken up for probe.