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.
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KKR defeat LSG via Super Over
Lucknow (PTI): Kolkata Knight Riders edged Lucknow Super Giants via Super Overs in a battle between two bottom-placed teams in the IPL, here on Sunday.
Chasing a modest 156, LSG suffered a batting collapse and managed to tie the contest and take it to Super Over with No. 9 Mohammed Shami striking a last-ball six against a wayward Kartik Tyagi, who leaked 16 runs in the final over.
But Sunil Narine bowled a stunning Super Over conceding just one run and taking two wickets to give KKR an easy target.
Rinku Singh then finished the chase with a boundary off first ball from Prince Yadav.
Earlier the KKR were in deep trouble with 93/7 in 15 overs but Rinku smashed a sensational 83 not out from 51 balls including four sixes in a row in the final over to lift them to 155/7.
Cameron Green (34) was the only other batter to reach double-digit scores as KKR suffered a familiar batting meltdown with Mohsin taking his maiden fifer.
In reply, LSG continued their dismal show with the bat to succumb to their fifth loss in a row.
Brief Scores:
Kolkata Knight Riders 155/7; 20 overs (Rinku Singh 83 not out, Cameron Green 34; Mohsin Khan 5/23). Lucknow Super Giants 155/8; 20 overs (Rishabh Pant 42). KKR won via Super Over.
