In the ongoing case related to the Hindenburg Research report on the Adani group of companies, one of the petitioners, Anamika Jaiswal, has filed a fresh affidavit in which she alleges that the Securities and Exchange Board of India (SEBI) concealed vital information and altered regulations to favor the Adani conglomerate. According to the affidavit, the markets regulator reportedly disregarded an alert from the Directorate of Revenue Intelligence (DRI) in early 2014 regarding Adani's over-invoicing and stock market manipulation, resulting in the siphoning of ₹2,323 crore rupees.
What's particularly striking is the claim that SEBI did not disclose this critical information to the Supreme Court and failed to initiate any investigation based on the DRI alert. Instead, SEBI stated that its investigation into potential rule and regulation violations by the Adani group of companies began on October 23, 2020.
This submission was made by one of the petitioners seeking an examination of the controversy surrounding the Hindenburg Research report and the allegations against the Adani Group. The Hindenburg report had accused the conglomerate of fraud by artificially inflating share prices, leading to a significant drop in the share values of various Adani companies, estimated at around $100 billion.
Consequently, the Supreme Court formed an expert committee led by retired apex court judge Justice AM Sapre to investigate the matter. The Supreme Court also directed SEBI to conduct an independent inquiry and submit a report.
In May, the expert committee released its report, which did not find any prima facie lapses by the markets regulator in the case. However, SEBI is yet to submit its report, and it recently requested a 15-day extension from the Supreme Court to provide a status update on its investigation.
The fresh affidavit by the petitioner alleges a conflict of interest on SEBI's part during its examination of the matter. It points out that Cyril Shroff, the founder and managing partner of the law firm Cyril Amarchand Mangaldas, is part of SEBI's Committee on Corporate Governance. Simultaneously, it notes that Shroff's daughter is married to Gautam Adani's son.
Furthermore, the affidavit claims that amendments to the SEBI Act have created a "shield and an excuse" for the Adani Group's regulatory violations and market manipulations to go unnoticed. It highlights that, until March 2020, the promoter group shareholding in all five Adani Group companies was between 74% and 75%, as per their own disclosures. This could potentially violate Rule 19A of Securities Contracts Regulation Rules, 1957 if the 13 suspected overseas entities were indeed front companies for Adani group promoters.
The affidavit also mentions that in 2014, the SEBI chief who allegedly ignored the DRI alerts, Upendra Sinha, is now a director at New Delhi Television (NDTV), a news channel currently owned by the Adani Group. Therefore, the petitioner is urging that the regulator's 24 probe reports against the Adani Group over the years be made public.
TAGS: SEBI Adani Group Supreme Court Concealment DRI Alert Hindenburg Research Report Conflict of Interest Regulatory Contraventions Market Manipulations Amendments Investigation Prima Facie Lapse Cyril Shroff Rule 19A Upendra Sinha NDTV Ownership.
