A petition was filed in the Supreme Court by the Securities and Exchange Board of India (SEBI) on Saturday, seeking an extension of six months to complete investigation into the controversy surrounding the Hindenburg Research report on Adani Group of companies and the allegations surrounding it.
As per SEBI, the 12 suspicious transactions cited in the Hindenburg report would need a rigorous probe of at least 15 months since those transactions were complex and having many sub-transactions.
Earlier on March 2, the Apex Court had directed the market regulator to finish the probe by May 2.
This was in addition to the investigation ordered by the Apex Court, to be conducted by an expert committee headed by retired apex court judge, Justice AM Sapre.
SEBI submitted on Saturday that it would need another six months to complete the probe.
the market regulator told the Apex Court that it has apprised the expert committee of the status, steps taken and interim findings in respect of the examinations and investigations carried out by it.
The probe would further require obtaining bank statements from multiple domestic as well as international banks and as the bank statements would also be for the transactions undertaken more than 10 years ago, this would take time and be challenging, noted the petition by SEBI.
It further said the process of seeking bank statements from the offshore banks would entail taking assistance from offshore regulators, which may be time consuming and challenging. However, the market regulator said it would try to complete the process in six months.
It listed three broad categories, under which the transactions requiring more time would fall:
(i) Those where prima facie violations have been found and a period of 6 months would be required to arrive at conclusive finding
(ii) Those where prima facie violations have not been found, a period of 6 months would be required to revalidate the analysis and arrive at conclusive finding
(iii) In cases where further examination/investigation is required and most of the data that is required for this purpose is expected to be reasonably accessible, a conclusive finding is expected to be arrived at in six months.
In its direction, a bench led by Chief Justice of India DY Chandrachud had ordered that as part of the ongoing investigation, SEBI shall also investigate:
(a) Whether there is a violation of Rule 19A of the Securities Contract Regulation Rules;
(b) Whether there is a failure to disclose transactions with related parties and other relevant information which concerns related parties to the SEBI in accordance with law;
(c) Whether there was any manipulation of stock prices in contravention of existing laws.
The Court also constituted an expert committee to review the regulatory mechanism in the light of the Adani-Hindenburg issue. SEBI was also directed to cooperate with the committee. In the application, SEBI has said that it has attended two meetings with the expert committee in April.