Adani row: SEBI disagrees with expert panel, says will take action if any violation found
New Delhi, Jul 10: Capital markets regulator SEBI on Monday told the Supreme Court that its 2019 rule changes do not make it tougher to identify beneficiaries of offshore funds, and action will be taken if any violation is found or established.
SEBI said it has continuously tightened rules concerning beneficial ownership and related-party transactions - key aspects in the allegations of Adani Group manipulating its stock price.
A Supreme Court-appointed expert committee had in an interim report in May stated that it saw "no evident pattern of manipulation" in billionaire Gautam Adani's companies and there was no regulatory failure.
It, however, cited several amendments the Securities and Exchange Board of India (SEBI) made between 2014-2019 that constrained regulators' ability to investigate, and its probe into alleged violation in money flows from offshore entities has "drawn a blank".
Without making any mention of the status report of its own investigation into allegations against Adani Group, SEBI in its latest affidavit to the Supreme Court said it did not agree with the expert committee observation of difficulties in identifying holders of economic interest behind an offshore fund.
It also differed with the panel observation that stocks will re-price if the markets feel actions taken in the past by the company were not desirable, saying even if the market may re-price the stocks of the company based on the past transactions, "there is no bar on SEBI to examine any securities laws violations because re-pricing of the stock has happened."
SEBI indicated it does not agree with the expert committee's views and action will be taken if any violation is found/established.
After a report of US short-seller Hindenburg Research alleging accounting fraud, stock market manipulation and improper use of offshore entities by Adani Group stirred a political row and triggered a rout in the conglomerate's stocks, dethroning Adani as the world's third richest man, the Supreme Court had on March 2 constituted the expert committee to investigate if there was any failure to disclose transactions with related parties and if stock prices were manipulated.
The committee was to work in parallel with the probe by Sebi into offshore entities investing in the Adani Group. The regulator was first asked to complete the probe in two months and then given another three months till August 14.
In the affidavit, SEBI said its 2019 rule changes in fact "tightened the disclosure requirement" related to beneficial owners.
In its 43-page filing, SEBI opposed the expert committee's recommendation that a firm timeline for the regulator to complete its investigation must be "embedded into the law", saying prescribing such limits "may compromise the quality of investigation", create constraints and increase litigation.
A bench headed by Chief Justice D Y Chandrachud is scheduled to hear the ongoing Adani-Hindenburg case on Tuesday.
In the affidavit, SEBI has given its views on the recommendations by the expert committee on issues like effective enforcement policy, judicial discipline, robust settlement policy, necessary timelines, surveillance and market administration measures, creation of financial redress agency and others.
"Prescribing timelines for initiation of investigation and proceedings may not be appropriate as the Board is mandated to form a prima-facie opinion (reasonable grounds) to appoint an investigating authority," it said.
"Further, the nature, scope and complexity of cases in the securities market vary significantly, and 'reasonable time' to complete investigation would depend on the facts of each specific case and availability of information. Therefore, prescribing specific timelines to complete the investigation may compromise the quality of the investigation," the SEBI said.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Allen, Raghuvanshi, Green power KKR to 29-run win over GT
Kolkata (PTI): Finn Allen blasted a 35-ball 93, while Angkrish Raghuvanshi hit an unbeaten 44-ball 82 as Kolkata Knight Riders kept their playoff hopes alive with a 29-run win over Gujarat Titans in the IPL match here on Saturday.
Sent in to bat, Allen went on a six-hitting spree, smashing 10 maximums and four boundaries to add 95 off 41 balls with Raghuvanshi (82).
Raghuvanshi then shared another 108 off 53 balls with Cameron Green (52 not out) to power KKR to a challenging 247 for 2.
In reply, GT could manage 218-4, riding on skipper Shubman Gill's 49-ball 85 and a 35-ball 57 from Jos Buttler. Opener Sai Sudarsan was retired hurt but returned to make a 28-ball 53 not out.
Sunil Narine (2/29) claimed two wickets and Saurabh Dubey snapped one for KKR.
For GT, Mohammed Siraj (1/50), Sai Kishore (1/38) were the wicket-takers.
Brief Score:
KKR: 247 for 2 in 20 overs (Finn Allen 93, Angkrish Raghuvanshi 82 not out, Camero Green 52 not out; Mohammed Siraj 1/50).
GT: 218 for 4 in 20 overs (Shubman Gill 85, Sunil Narine 2/29).
