During a recent hearing of multiple petitions in the Adani-Hindenburg case, it was revealed that the involvement of the Security Exchange Board of India (Sebi) was contested as a potential conflict of interest. The petitioners pointed out a family connection between one of Sebi’s members and the Adani group.
Conflict of Interest Allegations:
The petitioners argued that Sebi’s role in investigating the Adani group raised concerns due to the family ties between a Sebi employee, Cyril Shroff, and Karan Adani, the son of Adani Group Chairperson Gautam Adani. Cyril Shroff is the Managing Partner at Cyril Amarchand Mangaldas, a law firm, and also serves as a member of Sebi’s committee on corporate governance, which deals with offenses like insider trading.
Amendments Allegedly Favoring Adani:
It was further alleged that Sebi introduced a series of amendments to the Sebi Act, purportedly benefiting the Adani group. The petitioners claimed that Sebi not only neglected the case but also made regulatory changes that seemed to be tailored in favor of Adani.
Concealment of DRI Alert:
The petitioners also contended that Sebi concealed a January 2014 alert issued by the Directorate of Revenue Intelligence (DRI), which suggested that Adani had transferred funds and invested them in Adani-listed companies through offshore entities in Dubai and Mauritius. The board’s failure to investigate this alert and its subsequent lack of disclosure were raised as concerns.
Supreme Court’s Upcoming Hearing:
The Supreme Court is scheduled to take up this case on September 15, where these allegations of conflict of interest and regulatory misconduct will be further examined.
Sebi’s Investigation Focus:
Sebi’s inquiry into the Adani-Hindenburg case primarily centers on determining whether the Adani Group engaged in share price manipulation by exploiting gaps in minimum public shareholding (MPS) regulations and whether it failed to disclose transactions involving related parties. In a status report submitted to the Supreme Court, Sebi noted that 22 out of 24 investigations have been finalized, with two ongoing probes awaiting responses from external agencies.
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