Stage set for Sebi vs FinMin over Adani probe

The stage is being set for a Securities and Exchange Board of India (SEBI) versus Ministry of Finance (MoF) row over the investigation of Adani firms following the Hindenburg Research report controversy. While the market regulator Sebi has told the Supreme Court that it has not investigated any Adani group company since 2016, the MoF has asserted that it stands by its statement given in 2021 that Sebi was looking into the affairs of some Adani group entities over possible violation of Sebi norms.

On its part, Sebi, which was tasked by the apex court to probe Adani group firms, went back before the bench of chief justice D Y Chandrachud, justices P S Narasimha and J B Pardiwala and said that it had not investigated Adani group companies since 2016, which was one of the allegations by some petitioners.

On Monday, SEBI termed the allegations of it probing Adani group companies since 2016 as “factually baseless”.

According to the market regulator, the investigation in 2016 was about 51 listed companies from the country issuing global depository receipts, and no Adani firm was on the list.

However, the situation became complicated when after Sebi’s position was clarified in the court, the finance ministry asserted on Monday that it was standing by its earlier position.

On July 19, 2021, MoS finance Pankaj Chaudhary had placed the following statement in a written reply to the Lok Sabha: “Sebi is investigating some Adani group companies about compliance with Sebi regulations. Further, the DRI is investigating certain entities belonging to the Adani group of companies under laws administered by it.” The minister’s statement was issued following a query by Trinamool Congress MP Mahua Moitra.

On Monday the MoF tweeted, “The government stands by its replying Lok Sabha on July 19, 2021 to Q No. 72, which was based on due diligence and inputs from all concerned agencies.”

The MoF statement on Monday was in response to a query of Jairam Ramesh, Congress MP, who asked on tweeter whether the government had said untruths in the Parliament since its position was in direct contradiction to what the market regulator averred in the apex court of the land.

The Hindenburg Research report containing serious allegations of fraud committed by Adani group companies was published on January 24. It roiled not only the Adani group companies but also the markets in general to some extent. By the end of February, the Adani group firms had lost a total valuation to the tune of $150 billion.

Most of the shares have however recovered some lost ground since then.