SEBI probe into Adani drew a blank: Supreme Court-appointed panel
The Hindu
Supreme Court-appointed committee said it cannot conclude any regulatory failure around Adani Group’s stock rallies, and that SEBI has “drawn a blank” in its probe into alleged violations in money flows from offshore entities into the conglomerate
A six-member expert committee — constituted by the Supreme Court in the Hindenburg-Adani allegations case and headed by former Supreme Court judge, Justice A.M. Sapre — said that the Securities Exchange Board of India (SEBI) has “drawn a blank” and is in a “chicken-and-egg situation” in its investigation into the “ownership” of 13 overseas entities, including 12 Foreign Portfolio Investors (FPIs).
The 173-page report said, “SEBI has found 42 contributories to the assets under management of the 13 overseas entities. Various avenues have been pursued - including ED, CBDT and various market regulators in the seven jurisdictions where the contributories are situated. SEBI has drawn a blank”.
The foundation of SEBI’s suspicion that led to investigations into the overseas entities’ ownership is that they have “opaque structures”, because the chain of ownership of the 13 entities was not clear.
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The committee said that SEBI was investigating the ownership of the 13 entities since October 2020, with regard to allegations in the Hindenburg report about minimum public shareholding.
“The key issue is whether as the law stands, one could draw a conclusion that the FPIs are fronts for the promoters of the Adani Group... If such an outcome in the investigation would come about, it would mean that the promoters would not be compliant with the minimum public shareholding requirement,” the report pointed out.
While it emphasised the need for a “coherent enforcement policy”, the committee concluded that it would not be possible to return a finding of “regulatory failure” in compliance with stipulations governing minimum public shareholding.
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