The Securities and Exchange Board of India (SEBI) denied in the Supreme Court on May 15 allegations of investigating the Adani Group since 2016 as “factually baseless”, triggering a war of words between the Congress and the Ministry of Finance.
SEBI’s affidavit, filed on May 15, distanced the Adani Group from any “investigations” from 2016. The affidavit was in response to submissions made by advocate Prashant Bhushan before a three-judge Bench led by Chief Justice of India D.Y. Chandrachud in a hearing in the Hindenburg-Adani case on May 12.
The debate in court on May 12 was initially centred on a request made by the market regulator for a six-month extension in order to complete its inquiry into Hindenburg Research’s report accusing the Adani Group of “brazen stock manipulation and accounting fraud schemes over the course of decades”. The court had even urged the SEBI to show “some alacrity” in its probe.
However, the May 12 hearing took an unexpected turn when Mr. Bhushan, for the petitioners, submitted orally that the SEBI had been investigating Adani since 2016. Solicitor General Tushar Mehta vehemently denied Mr. Bhushan’s submission. He said the latter was referring to a “completely unconnected” investigation.
The SEBI’s affidavit took pains to explain that “the ‘investigation’ referred to by the petitioners pertained to the issuance of Global Depository Receipts by 51 Indian listed companies”.
“No listed company of the Adani Group was part of the aforesaid 51 companies. Pursuant to the completion of investigation [into the 51 companies], appropriate enforcement actions were taken,” the SEBI maintained.
However, Congress leader Jairam Ramesh took to Twitter to compare the market regulator’s claim in its affidavit that “the allegation that SEBI is investigating Adani since 2016 is factually baseless” with a statement made by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha on July 19, 2021.
“The Minister of State for Finance, Pankaj Chaudhary, had told the Lok Sabha on July 19, 2021 that SEBI had been investigating the Adani Group. Now SEBI tells the Supreme Court that they have not been investigating any of the serious allegations against Adani! Which is worse — misleading Parliament, or being fast asleep as lakhs of investors are duped by alleged money-laundering and round-tripping using offshore shell companies. Or even worse, was there a restraining hand from above?” Mr. Ramesh tweeted.
The relevant page of the Lok Sabha records posted by Mr. Ramesh on social media shows that one of the questions asked in the Parliament by Trinamool Congress MP Mahua Moitra was ‘whether the FPIs and/or Adani entities are under investigation by SEBI, IT, ED, DRI, MCA for suspicious transactions…”
To this, the Minister had confirmed that “SEBI is investigating some Adani Group of companies with regard to compliance with SEBI regulations. Further, the Directorate of Revenue Intelligence is investigating certain entities belonging to the Adani Group of companies under laws administering it”.
The Ministry responded to Mr. Ramesh’s tweet with a mere statement that “the government stands by its reply on July 19, 2021”. It maintained that the response in the Parliament at the time was “based on due diligence and inputs from all concerned agencies”.
When asked about the government’s affirmation of its reply in Parliament about the SEBI’s ongoing probe into the Adani group, Mr. Ramesh told The Hindu that this was at odds with the regulator’s stance.
“Then why did SEBI say what it said to the Supreme Court,” he asked.
