Even as SEBI has formed a prima facie view on 12 transactions carried by Adani Group, it is also examining potential violation of short-selling norms in India by Hindenburg Research.
The US-based firm had made several allegations against Adani group but had acknowledged that it wanted to short Adani stocks.
SEBI has analysed and formed its view also on trading in Adani Group stocks during pre- and post-publication of the Hindenburg Report and it is one of the key areas, where major revelations would be made, the sources said. This apart, SEBI has also formed its views on likely violation of FPI regulations, offshore derivative instrument (P-Note) norms and insider trading.
Sources told businessline that SEBI is specifically looking into 12 transactions by Adani group, including alleged suspicious transactions where possible violations or misrepresentation of financials were flagged, circumvention of regulations involving fraud, related party transaction disclosures, corporate governance matters, and that of minimum public shareholding norms in the context of holding in Adani Group by foreign portfolio investors and stock manipulation.
Also read: Adani Group stocks under selling pressure
Market regulator SEBI is likely to have formed its prima-facie view on some of the key aspects in the matter related to the ongoing investigations of Adani Group but has asked the Supreme Court for more time because it has to coordinate with multiple regulators across different geographies to confirm its findings, sources told businessline .
SEBI has informed the Supreme Court and the committee appointed by it about the points on which it has formed its prima-facie view. The current probe against the Adani Group and related stock price manipulation is the largest investigation by SEBI in recent years against any corporate house in India.
Why did SEBI seek a six-month extension for the probe?
SEBI has told the apex court that the Securities Exchange Commission (SEC) of the US for the year 2020, took about 34 months to complete its investigations. Based on the sample of 56 cases that were examined by SEBI, where Hindenburg had published its report, it was observed that in 13 cases, the SEC took action against the listed companies, where the time period for investigations ranged 9 months to 5 years with an average of 2 years.
Seeking more time
Further, the regulator has told the apex court that keeping in view the foregoing circumstances, it would take further time to arrive at verified findings and conclude the investigations and in respect of the 12 suspicious transactions. In the normal course, SEBI has said it would have taken at least 15 months for completion of the investigation of these transactions. Yet, it has sought only six months to conclude its probe, which has to peel-off several layers, cutting across international jurisdictions.
Also read: Adani probe: SEBI move is disappointing
Sources said that SEBI has sought information from few FPIs holding Adani shares on the ultimate beneficiaries of their stake. But the FPIs directed SEBI to regulators in the jurisdictions where they were registered, the sources said.
Among the regulators, the authorities in Mauritius have already informed SEBI that they could not find any violations of norms by FPIs registered in their jurisdictions, which were holding stake in Adani Group companies, the sources said. SEBI has shared extensive data, supporting notes and other information with the SC-appointed committee on its probe and the various aspects that it is looking into.