NEW DELHI: The expert panel set up by the Supreme Court in the Adani-Hindenburg case refused to conclude in its report if there was any regulatory failure on the part of market regulator SEBI. The panel has also suspected that there might be a link between the promoters of Adani Group and the 13 foreign funds invested in the Adani Group.
“SEBI has been suspecting 13 overseas entities of having links to the promoters of the Adani Group and thereby suspecting that the shareholding in the listed Adani stocks in the hands of these 13 overseas entities need not qualify as public shareholding,” said the committee in its 173-page report.
“In the instant case, it appears that SEBI is not able to make out a case, and such a position of the case not being made out is presented as a prima facie position, which cannot be confirmed unless more investigation is done. In any prosecution of proceedings, whether civil or criminal, the presentation of a "prima facie" case is the responsibility of the plaintiff or the prosecutor,” it noted.
It added, “Once a prima facie case is made out, the burden shifts to the accused; The inversion of the process of proving a charge, leaves the matter in the realm of suspicion. It is trite law that suspicion, however strong, cannot replace proof. However, the publication of the Hindenburg Report has reinforced SEBl's suspicion that perhaps there is something amiss and it desires to probe this further, and is seeking time.”
The panel also said that the foreign funds have not been able to demonstrate that their beneficial owners aren't funded by the Adani Group.
The 6- member expert panel was headed by retired Supreme Court Justice AM Sapre and comprised of former SEBI chief OP Bhatt, former chief of the BRICS Bank KV Kamath, Nandan Nilekani of Infosys and advocate Somsekhar Sundaresa.
The Supreme Court had appointed the panel with SEBI to investigate the crash of Adani Group shares after US-based short seller Hindenburg Research alleged that there is accounting fraud and brazen stock manipulation by Adani Group.
On the functioning of SEBI, the panel in its report noted that 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.
SEBI has also identified 13 specific transactions where it is investigating the underlying transactions regardless of whether the transactions are legally considered "related party transactions" from the standpoint of whether or not these transactions were fraudulent.
“SEBI is actively engaged in collecting data on these transactions. The Committee would therefore be unable to comment without further input, except to say the investigations must be completed in a time-bound manner in accordance with the law,” the report noted.
