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Monday, May 29, 2023

Expert panel tells SC: No artificial stock trading found in Adani probe

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Since 2020, SEBI has been in a “chicken and egg situation” identifying the proprietors of 13 offshore firms. SEBI has failed to determine who controls 13 foreign businesses, and the Supreme Court has extended its Adani-Hindenburg probe deadline. According to the report that was presented to the Supreme Court by the expert committee in the Adani-Hindenburg case, there was no pattern of fake trading detected with the stocks of the Adani group. This information was included in the report.

In addition, the panel stated that the Securities and Exchange Board of India (SEBI) has not been able to identify the ownership of 13 offshore organizations that are the subject of an inquiry since the year 2020, and that it is currently stuck in a “chicken and egg situation.”

The panel also stated that SEBI was in a “chicken and egg situation” since it had not been able to identify the ownership of 13 offshore firms that were the subject of a probe from the year 2020. It further informed the Supreme Court that SEBI’s investigation into the ownership of 13 foreign businesses had “drawn a blank” for whatever reason.

“Despite best efforts by the SEBI, they have not been able to crack who owns 13 foreign entities embroiled in the Adani allegations,” the panel observed. “The SEBI has been unable to crack who owns 13 foreign entities.”

The committee reported that the computers had generated 849 automatic “suspicious” notifications about Adani stocks. According to the report, the stock exchanges evaluated all 849 notifications, and a total of four reports were sent to SEBI; two of these reports were submitted before the Hindenburg report, while the other two were submitted later.

The committee informed the court that it attempted to speak with numerous foreign security firms about the Adani-Hindenburg matter and that it shared this information with the court.

According to the report that was put together by the committee, “none of the international security firms and banks were desirous of engaging with the committee.” According to what the committee reported to the court, very few of them claimed to have a conflict of interest due to their business connections with the Adani Group.

“Goldman Sachs suggested that the committee may profit from engaging with the Asia Securities Industry and Financial Markets Association, an industry body,” the report said. “However, the Asia Securities Industry and Financial Markets Association too disclaimed any expertise or ability to contribute to the committee.”

On Wednesday, the Supreme Court extended the deadline for SEBI to complete its investigation into the Adani-Hindenburg issue till August 14. The market regulator was informed by a bench led by the Chief Justice of India (CJI), DY Chandrachud, that the court had previously given two months for the probe, but that it has now granted a three-month extension for the investigation.

On Monday, SEBI notified the Supreme Court that any inaccurate or premature conclusion of its probe into the probable failures of the Adani Group to disclose relevant regulatory information might impede the administration of justice.

The probe is connected to a study that was issued in the United States by a short-seller named Hindenburg Research. In the research, Hindenburg Research accused the Adani Group of fraud and stock manipulation and presented many governance concerns regarding the company.

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