Sebi probe into Adani drew a blank: SC-appointed panel

But panel says there is proof of build-up in short positions on Adani Group stocks ahead of Hindenburg report

Gautam Adani

An expert committee appointed by the Supreme Court 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.

But the six-member panel said there was evidence of build-up in short positions on Adani Group stocks ahead of short seller Hindenburg Research’s report, and profiting from squaring off positions after prices crashed post-publication of the damning allegations. 

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“At this stage, taking into account the explanations provided by Sebi, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation,” the panel said in the report submitted to the SC. The panel said it also cannot say that there has been a regulatory failure on Sebi’s part on minimum public shareholding rules or on related party transactions.  The SC appointed the committee parallel to the probe that markets regulator Sebi was conducting into allegations against Adani Group and the plunge in the apples-to-port conglomerate’s shares, triggered by Hindenburg’s allegations. It was headed by retired Supreme Court Justice AM Sapre and comprised OP Bhatt, KV Kamath, Nandan Nilekani and Somsekhar Sundaresan. 

“The securities market regulator suspects wrongdoing but also finds compliance with various stipulations in attendant regulations. Therefore, the record reveals a chicken-and-egg situation,” the report said.

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