Sebi responds to social media comments on the Adani case in SC

Sebi on Wednesday told the Supreme Court that a statement by the Union Minister of State for Finance in Parliament in 2021 about its investigation against some Adani group of companies was related to possible non-compliance with Minimum Public Shareholding (MPS) Norms, and consequential violations.

This investigation had commenced in October 2020 and not in 2016, it said, in a bid to respond to social media comments on the issue.

In a fresh affidavit, the Sebi clarified that the 2016 move was related to Global Depository Receipts (GDRs) and not connected to any Adani Group Company.

"It may be noted that the investigation referred to (by the Minister) was in respect of possible non-compliance with Minimum Public Shareholding (MPS) Norms, and consequential violations. This investigation had commenced in October 2020. It is hereby confirmed that the investigation referred to by the Hon'ble Minister had not commenced in 2016," it said.

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In a short written response, the Sebi said it has made a statement to this court that it is examining investigating the allegations made in the Hindenburg Report. One of these allegations was related to non-compliance with MPS norms.

"The current status of this investigation has been submitted to the Expert Committee constituted by this court," it stated.

In the context of investigation into MPS norms, the Sebi has already approached eleven overseas Regulators under the Multilateral Memorandum of Understanding with International Organisation of Securities Commissions (IOSCO). Various requests for information were made to these Regulators. The first request to overseas Regulators was made as early as on October 06, 2020, it added.

"It is this investigation that had commenced in October 2020 that was referred to by the Hon'ble Minister of State for Finance in his reply to the Parliament," it said.

"It is the understanding of Sebi that the root cause of the erroneous linkage of a 2016 matter to the Adani Group due to its probe related to Global Depository Receipts by 51 entities," it added.

The Sebi further said in 2016, it passed an order pertaining to the issuance of Global Depository Receipts (GDRs) by 51 Indian listed companies.

"No listed company of Adani Group was part of the aforesaid list of 51 companies, which has been specifically stated in our rejoinder dated May 15, 2023 to the Supreme Court. However, there were some FPIs including Cresta Fund limited, Albula Fund Limited and APMS Fund Limited, the GDR relevant accounts of which, were frozen as a consequence of the 2016 order. It is hereby clarified that this action was purely a consequence of the GDR matter and not related to any examination into any Adani Group company," it further stated.