India’s market regulator gets more time to finish Adani probe

The group’s shares experienced a significant drop after being criticised by US-based short-seller, Hindenburg Research.

• Pramod Thomas
• 17 May, 2023

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By: Pramod Thomas

India’s Supreme Court has granted an extension to the country’s market regulator, the Securities and Exchange Board of India (SEBI), until August 14 to conclude its investigation into potential violations of securities law and regulatory disclosures by the Adani group.

The court has instructed SEBI to complete its probe within three months and submit a status report on the investigations against the Adani group.

The group’s shares experienced a significant drop after being criticised by Hindenburg Research, a US-based short-seller, in January.

SEBI had initially requested a six-month extension to finalise its investigation in a petition filed on April 29, following a court order on March 2 that required the regulator to submit a report by May 2.

Hindenburg Research had raised several governance concerns around the Adani group, leading to a loss of more than $100 billion (£80.4bn) in the market capitalisation of companies in the group founded by billionaire Gautam Adani.

Following this, the Supreme Court had asked SEBI to probe some of the allegations made and submit a report to a court-appointed panel.

While requesting additional time to complete its investigations, the regulator had said it needed time to unravel complex transactions involving the conglomerate’s listed, unlisted and offshore entities.

The regulator told the top court that Adani group’s listed companies were already under investigation for violation of public float norms since October 2020. Under Indian securities law every listed company must have 25 per cent of public float. Adani group companies are being probed for violation of this law.

The Supreme Court directed the market regulator to place on record its findings so far relating to the investigation on violation of public float by the Adani group.

SEBI, in its previous filing with the top court, said it has formed a preliminary view on the allegations and governance concerns levelled by Hindenburg Research in its January report, but did not disclose its view.

(Reuters)