 "Supreme Court")
The Supreme Court (SC) on Friday hinted that it might grant an extension of three months to the Securities and Exchange Board of India (Sebi) to conclude its investigation in the Adani-Hindenburg matter.
The Bench didn’t seem inclined to accept the market regulator’s plea for a six-month extension, but said it would decide on the final timeline after reading the submissions made by the six-member committee headed by Justice (retd) A M Sapre over the weekend. The next hearing in the matter will take place on May 15.
“The report of the committee constituted by the court —it's with the registry. We haven’t had time to read it. We’ll keep this matter on Monday,” the Bench comprising Chief Justice D Y Chandrachud, Justice P S Narasimha, and Justice J B Pardiwala said.
Appearing for the applicant, Advocate Prashant Bhushan said that Sebi had been investigating matters related to the Adani group since 2016 and could have received details of shell companies and transactions much earlier.
Solicitor General Tushar Mehta, appearing for Sebi, argued that those investigations were in totally unconnected matters, and highlighted challenges in expediting the probe.
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Mehta informed the Bench that Sebi had already approached offshore regulators to seek assistance. He added that the process of seeking bank statements and transactions would be challenging and time consuming. He also clarified the ‘12 suspicious transactions’ mentioned in Sebi’s plea were not the market regulator’s findings. Mehta argued that six months’ time was also compressed while highlighting that the US SEC took an average 34 months for completion of investigations.
The SC Bench wasn’t outright in favour of a six-month extension.
“To extend time for six months would not be appropriate because we initially conceived of the investigation being done in two months. We are not saying we will not give time. But six months may not be an appropriate time,” said the Bench, before hinting that it might look at giving a three-month extension.
Mehta said Sebi had sought assistance from the International Organization of Securities Commissions (IOSCO), a body of global market regulators. On Bhushan’s request to disclose what investigations had been done so far by Sebi, the Bench stated, “This will affect the investigation. It is not a criminal investigation.”
During the hearing, the Bench also chided one of the lawyers representing the petitioners. “We have constituted a committee. The committee is exactly looking at the remit if there was a regulatory failure. It is pretty unfair of you to say without looking at the report that there was a regulatory failure. We haven’t said that,” said the Bench, adding that such allegations could affect the stability of the stock market.
On March 2, the apex court had asked Sebi to conclude the investigation in two months and file a status report by May 2.
In its application submitted on April 29, Sebi said it would require time to ascertain possible violations related to misrepresentation of financials, circumvention of regulations, and fraudulent nature of transactions in respect of 12 suspicious transactions.
Opposing the request, the petitioner, Advocate Vishal Tiwari, had submitted that Sebi was trying to make the probe “endless”.
