Hindenburg - Adani case: Petitioner tells Supreme Court SEBI has conflict of interest in probing Adani; concealed stock market manipulation

The Securities and Exchange Board of India (SEBI) concealed facts about the Adani group and changed the law to benefit the conglomerate, the Supreme Court has been told in the case concerning the Hindenburg Research report on the Adani group of companies..In a fresh affidavit by one of the petitioners Anamika Jaiswal, it was stated that the markets regulator ignored a Directorate of Revenue Intelligence (DRI) alert in early 2014 about over-invoicing and stock market manipulation by Adani amounting to siphoning of ₹2,323 crore rupees."It is shocking that the SEBI has suppressed and concealed this important information from this Hon'ble Court and never conducted any investigation based on the DRI alert ... Rather, they have categorically stated before the Expert Committee that the investigation into possible contraventions of rules and regulations by the Adani group of companies started on 23.10.2020".The submission was made by one of the petitioners in the case seeking examination of the controversy surrounding the Hindenburg Research report on the Adani Group of companies and allegations against the conglomerate. .The Hindenburg report alleged fraud on the part of the conglomerate by inflating share prices. The report had led to a fall in the share value of various Adani companies, reportedly to the tune of $100 billion. Subsequently, the Supreme Court had formed a committee headed by retired apex court judge, Justice AM Sapre to examine the controversy. The Supreme Court had also asked SEBI to independently investigate the matter a submit a report. The expert committee had in its report in May found no prima facie lapse on part of the markets regulator in the matter.The SEBI is yet to submit its report. Last month, the SEBI had sought a 15-day extension from the Supreme Court to furnish a status report on its probe into matter..The fresh affidavit filed by the petitioner has, however, alleged conflict of interest on SEBI's part in examining the matter. The affidavit highlighted that Cyril Shroff, the founder and managing partner of law firm Cyril Amarchand Mangaldas, is part of the SEBI's Committee on Corporate Governance. At the same time, Shroff's daughter is married to Gautam Adani's son, the affidavit pointed out. .It was also claimed that the changes to the SEBI Act provided a 'shield and an excuse' for the Adani Group's regulatory contraventions and market manipulations to remain undetected."Given the series of amendments to the LODR [Listing Obligations and Disclosure Requirements Regulations], 2015, it has become difficult to establish the contraventions ... the promoter group shareholding in all 5 of the Adani Group companies till March 2020 was between 74% and 75%, as per their own discloures. These companies would be in clear violation of Rule 19A of SCRR [Securities Contracts Regulation Rules], 1957 if the 13 suspected overseas entities were/are front companies for the Adani group promoters," the affidavit said. .Notably, the affidavit pointed out that in in 2014, the SEBI chief who allegedly ignored the DRI alerts was Upendra Sinha, who is now a director at New Delhi Television (NDTV), a news channel now owned by the Adani Group.The petitioner, therefore, said that the regulator's 24 probe reports against the group over the years be made public.