Adani Shielded By SEBI, Petitioner Files Affidavit In Supreme Court

The market regulatory board, Securities Exchange Board of India (SEBI) has been accused of shielding the Adani Group. The petitioner, Anamika Jaiswal has alleged that SEBI has been shielding the multinational conglomerate. The allegation points that SEBI has not apprised the Supreme Court about an investigation which was taken up by the Directorate of Revenue Intelligence (DRI) against the Adani Group on overvaluation of import equipment and machinery from several entities of the group from a subsidiary based at UAE, reported the mint. The SEBI is said to have concealed, as well as tweaked regulations in order to shield Adani’s contraventions on regulations and manipulations of price remain undetected.

The affidavit said that, the DRI had sent a letter to the SEBI Chairperson, U K Sinha, in the year 2014, signaling of a possible manipulation of the stock market by the Adani Group. Jaiswal added that the letter had a CD accompanying, which had evidence of tapping Rs. 2,323 crore and that the regulator SEBI, closed the investigation without acting upon the DRI’s alerts. In 2017, Sinha retired as the Chairperson of SEBI, and then became the non-executive director of Adani acquired NDTV.

Further, Jaiswal said that the CBI also had to close the case because, the sanction for prosecution was not granted by the Maharashtra Government.

The affidavit, said that the conduct of SEBI amounts to perjury. It said that “it is shocking that SEBI has not disclosed the receipt of the said letter (DRI letter) and evidence from the DRI till date before this Hon’ble Court,” on the earlier statements to the court by SEBI, stating that investigations on the Adani group were started only in June-July 2020.

SEBI, early, this month had given a report on the latest status on the investigation, on which Jaiswal has said that the investigations in 22 cases, out of the total 24 cases, which arises from the Hindenburg report has been called as final by SEBI, but the outcomes related to these have been kept undisclosed by the regulatory board.

A conflict of interest has also been alleged by the petitioner in the affidavit. One of the members of SEBI’s committee on corporate governance which looks at wrongdoings in insider trading was Cyril Shroff, who is managing partner of Cyril Amarchand Mangaldas law firm. Out of the 24 cases, 5 cases are allegations on insider trading. The affidavit claimed that, “Cyril Shroff’s daughter is married to Karan Adani, son of Gautam Adani, showing clear conflict of interest,” reported the HT.

Jaiswal’s affidavit also made reference to reports by international news papers that reported on Adani Group’s contravention of regulations. It also said of amendments that SEBI made to regulations which has in turn benefited the Adani Group. The affidavit says that the regulations related to foreign portfolio investors, listing obligations and disclosure requirements in the year 2014 and 2015 were to benefit the Adani Group, reported the mint.

This matter is expected to be taken up by the apex court on September 15, 2023.

The Hindenburg report in January 2023 had pointed at accounting fraud and stock manipulation by the Adani Group. Though the group denied it, it led to the tumbling down of its stocks. With many petitioners on this, the apex court set up a panel to look into the failure on regulations by SEBI and allegations against the Adani Group. The panel’s report in May, had said that the allegations and violations by the group could not be proved ‘at this stage,’ reported the Mint.