Adani-Hindenburg row: SEBI disagrees with expert panel

Satya Prakash

New Delhi, July 10

Markets regulator SEBI on Monday told the Supreme Court that there was no ‘skyrocketing’ of securities violations as mentioned by the court-appointed Expert Committee that looked into Hindenburg Research report on Adani Group of companies and asserted it has addressed concerns raised by the panel in its report.

In an application seeking ‘appropriate orders’ filed in the top court, it submitted its views on the recommendations made by the Expert Committee on the Adani-Hindenburg case.

In its report submitted to the top court in May, the Expert Committee had said there was no evidence of stock price manipulation in Adani Group companies. However, it had observed that the proceedings initiated by SEBI in 2021-22 have skyrocketed to 7,195 cases as compared with 562 cases in 2020-21 and 249 cases in 2019-20.

“In this respect, it is submitted that the increase of Adjudication proceedings initiated in 2021-22 i.e. 7,195 was an outlier due to the large number of adjudication proceedings in Illiquid Stock Options (ISO) matters initiated that year. If ISO matters, being the anomaly, are netted out for FY 2021-22, the total number of proceedings initiated in FY 2021-22 would only be 416,” SEBI submitted.

Petitioner Vishal Tiwari said contrary to public perception, no clean chit has yet been given to the Adani Group. The top court is likely to take up the matter on Tuesday.

For effective enforcement policy, the Expert Committee headed by Justice (retd) AM Sapre had recommended, inter-alia, to develop a proper enforcement policy that would optimise the utilisation of precious regulatory resources and to lay down criteria on the basis of which the SEBI may choose what proceedings/measures to initiate. However, SEBI said it “has a documented Enforcement Manual which is applicable to all quasi-judicial and other enforcement proceedings conducted by the SEBI.