The expert committee appointed by the Supreme Court following the Hinderberg Research allegations against the Adani Group has concluded that it would be difficult to point to a regulatory failure on the part of SEBI.

On the question of whether there was price manipulation in Adani stocks, the committee said that SEBI didn’t find any pattern of “artificial trading” or “wash trades” among the same parties.

“In one of the patches, where the price rose, the FPIs under investigation were net sellers. In a nutshell, there was no coherent pattern of abusive trading that has come to light,” the committee said in its report.

SEBI also found that some entities have taken short positions prior to the publication of the Hindenburg report and have profited from squaring off their positions after the price crashed upon publication of the report.

Also read: FinMin refutes Jairam’s allegation of different tones on Adani matter

“Suffice to say it would not be possible to return a finding of regulatory failure on this count since SEBI has an active and working and surveillance framework,” the report said. 

Minimum Public Shareholding

On the allegation of violation of minimum public shareholding, the report expressed concerns over SEBI’s inability to get adequate data due to the absence of enforcement policy.

The report noted that although the 2018 regulation eliminated the need for Foreign Portfolio Investors (FPIs) to disclose the final beneficiary, investigations in 2020 sought to uncover the ultimate beneficiary by scrutinising the layers involved.

Also read: SC gives SEBI time till August 14 to complete enquiry into Hindenburg-Adani allegations

“It is this dichotomy that has led to SEBI drawing a blank worldwide, despite its best efforts. The market regulator suspects wrongdoing but also finds compliance with various stipulations…its a chicken and egg situation, ” the report said adding that in the absence of data, it is difficult to find fault with SEBI.

To read complete report of the Supreme Court constituted committee, click here