NEW DELHI: A committee set up to probe the Adani Hindenburg saga by the SC submitted its report on Friday. Cannot conclude that there has been a regulatory failure on the part of SEBI mentioned the panel.
The report submitted by the panel headed by retired judge A.M. Sapre probing the controversy said- “The committee is of the view that it would not be possible to return a finding of a regulatory failure in relation to compliance with the regulatory stipulations governing minimum public shareholding stipulation…” The report said: “It is noteworthy that a strong feedback on the Hindenburg Report is that it contained no new data but was substantially a collection of inferences from data in the public domain.”
Citing difficulty in arriving at a conclusion to unearth the regulatory failure of the legislative side, it acknowledged that an effective enforcement policy was needed. The SC advised the policy must be consistent with the legislative policy adopted by Sebi.
Furthermore, the report pointed out that the ownership of 13 overseas entities is not clear and was being probed since October 2020.The committee said: “The legislative policy of SEBI under the FPI Regulations requiring disclosure of beneficial owners was in consonance with the requirements under the PMLA. Besides, in 2018, the very provision dealing with ‘opaque structure’ and requiring an FPI to be able to disclose every ultimate natural person at the end of the chain of every owner of economic interest in the FPI, was done away with.” The report said: “Yet, in 2020, the investigation and enforcement has moved in the opposite direction, stating that the ultimate owner of every piece of economic interest in an FPI must be capable of being ascertained. It is this dichotomy that has led to SEBI drawing a blank worldwide, despite its best efforts.”
The US short seller’s mind-boggling report had accused Gautam Adani’s port-to-energy empire of stock manipulation among other fraud allegations.
A committee was constituted by the SC comprising O.P. Bhatt, Justice J.P. Devadhar (retired), K.V. Kamath, Nandan Nilekani, and advocate Somashekhar Sundaresan headed by Justice Abhay Manohar Sapre, former judge of the Supreme Court to investigate whether there has been a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to Adani Group.