Under the scanner: Sebi steps up probe into Adani group controversy

The Securities and Exchange Board of India (Sebi) has stepped up its probe into the Adani group controversy, with the Supreme Court-set deadline to submit its findings fast approaching.

The markets regulator, according to sources, has been seeking a barrage of information from the Adani group and market intermediaries at frequent intervals for the past two weeks. The information sought pertains to related-party transactions (RPTs) done by the 10 listed firms and unlisted companies belonging to the power-to-ports conglomerate.

Details of the shareholding pattern, disclosures, and other information to corroborate the group’s published numbers and claims have also been sought, according to people familiar with the matter.

Sebi officials have been working overtime to ensure a comprehensive probe as directed by the apex court, the sources said. To expedite the investigation, Sebi has formed two core teams under its Chairperson Madhabi Puri Buch: One is looking into the alleged manipulation of Adani group shares, along with the market movement before and after the publication of the Hindenburg Research’s report about the Gautam Adani-led conglomerate.

The other team is probing alleged failures in reporting related-party transactions and has sent queries to the Adani group.

On March 3, the Supreme Court asked Sebi to “expeditiously conclude the investigation within two months and file a status report”.

The key focus of the investigation is on alleged violation of minimum public shareholding norms, failure to disclose RPTs, and allegation of stock price manipulation. The report has to be submitted on May 2.

The six public holidays during the probe period have added to work pressure at Sebi, said a source.

The Adani group declined to comment on a detailed questionnaire sent by Business Standard on Thursday. The email sent to Sebi remained unanswered. The regulator is also cross-checking data it collated from different sources, including stock exchanges, custodians, credit rating agencies, banks, and other agencies, said the sources.

They said in case of not-so-serious offences, such as non-disclosure under securities law, the company could be made liable for monetary penalty. In such cases, companies typically opt for a consent mechanism to settle the case.

But any action would be decided after the conclusion of the ongoing probe report and further SC directions. The January 24 report by Hindenburg Research against the Adani group is also being looked at as to whether it was aimed at weakening the Indian securities market.

Under the scanner

• Two probe teams formed under Sebi Chairperson Madhabi Puri Buch
• While one team is looking into alleged manipulation of Adani group share, the other is probing any failure in reporting related-party transactions
• Regulator is seeking details of shareholding pattern, disclosures, and any other information to corroborate the group’s published numbers and claims
• Sebi, based on the SC’s directive, to submit investigation report on May 2