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Supreme Court Considers Granting Three-Month Extension for SEBI's Adani-Hindenburg Probe

By LawStreet News Network      15 May, 2023 09:48 PM      0 Comments
Supreme Court Considers Granting Three-Month Extension for SEBI's Adani-Hindenburg Probe

NEW DELHI: The Supreme Court on Friday said it may grant three months more to the Securities and Exchange Board of India to complete its probe into the controversy surrounding the Hindenburg Research report on the Adani Group of companies.

A bench of Chief Justice of India  D Y Chandrachud and Justices P S Narasimha and J B Pardiwala showed its disagreement to a contention by Solicitor General Tushar Mehta that the SEBI's plea for six more months was a compressed time period looking into very scope and expanse of the probe.

"You complete your investigation in three months and come back to us, because there has to be some alacrity. We cannot say that you need a minimum six months," the bench told Mehta, representing SEBI.

The court fixed the matter for Monday for passing the order on SEBI's application for more time.

The bench also said it has received report of the Justice Abhay Manohar Sapre committee appointed by it. It said the report filed in sealed cover would also be dealt with on Monday as the bench could not read due to paucity of time.

During the hearing, the bench indicated to Mehta it will give you three months’ time to SEBI and fix the matter for consideration on August 14.

Advocate Prashant Bhushan, appearing for the petitioners, opposed the plea for six months additional time for the SEBI.

He said that they should have disclosed to the court the information on the investigation conducted so far. “What investigations have been done so far on this matter, because the Hindenburg was not making these allegations for the first time,” he said.

The bench, however, disagreed to his argument.

"Suppose they were to tell us what they have learnt so far in the investigation then to ask them to disclose this would be affect their probe. It is not a criminal investigation that we are looking at the case diary. It would not be proper at this stage,” the bench said.

Mehta, however, submitted pressed further, “I have taken instruction from the highest administrative level. Six months are also a compressed period and I am saying it with a degree of sincerity. I will not be promising something, which we also know is something not achievable”.

On April 29, the Securities and Exchange Board of India (Sebi) moved the Supreme Court seeking six-months extension to complete its probe into Hindenburg allegations of “stock manipulation” by the Adani group.

In its application, the market regulator said, “Applicant/SEBI most respectfully submits that keeping in view the forgoing circumstances, it would take further time to arrive at verified findings and conclude the investigation….. for ascertaining possible violations related to mis-representation of financials, circumvention of Regulations and/or fraudulent nature of transactions in respect of 12 suspicious transactions…..given the complexity of the matter, SEBI in the normal course would take at least 15 months for completion of the investigation of these transactions, but is making all reasonable endeavours to conclude the same within six months”.

It submitted that in order to conduct a proper investigation and arrive at verified findings, it would be just, expedient and in the interest of justice that the apex court extends time to conclude the investigations by at least 6 months.

In an order passed on March 2, the top court had set a deadline to submit a status report on May 2, while asking Sebi to expeditiously conclude the investigation and file a status report.

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