SEBI Accused of Concealing 2014 DRI Alert Regarding Adani Group’s Financial Manipulations, Claims Hindenburg Case Petitioner
In a startling revelation, a petitioner involved in the Hindenburg case has accused the Securities and Exchange Board of India (SEBI) of suppressing a crucial piece of information dating back to January 2014.
According to the petitioner, SEBI had concealed a significant alert from the Directorate of Revenue Intelligence (DRI) regarding the Adani Group’s alleged money siphoning activities, wherein funds were purportedly diverted and invested in Adani-listed companies through offshore entities based in Dubai and Mauritius.
The DRI’s investigation in 2014 revolved around suspicions of overvaluation of imported equipment and machinery by various entities within the Adani Group, with the products originating from a subsidiary based in the UAE, as per a report by the news agency ANI.
Expressing her dismay, petitioner Anamika Jaiswal exclaimed, “It is shocking that SEBI has suppressed and concealed this vital information from the highest court and has never initiated any inquiry based on the DRI alert.” She further pointed out that SEBI had not provided any information about receiving the aforementioned letter or evidence from the DRI, even during the current proceedings.
Jaiswal continued, “Rather, they have explicitly stated before the Expert Committee that the investigation into potential breaches of rules and regulations by the Adani group of companies commenced on October 23, 2020, after receiving complaints in June-July 2020,” as detailed in the affidavit.
The petitioner argued that the DRI’s letter clearly indicated that SEBI had withheld crucial facts and furnished false information, which could be tantamount to perjury, according to ANI reports.
Highlighting a curious aspect of the situation, Jaiswal noted, “The then SEBI chairperson UK Sinha, instead of taking action based on the DRI letter, chose to close the ongoing investigations into the Adani group.
It is worth mentioning that the said SEBI chairperson was appointed on February 18, 2011, and retired on March 1, 2017.” Adding to the intrigue, the affidavit revealed that Sinha currently serves as a “Non-Executive Independent Director-Chairperson” of NDTV, a company acquired by the Adani group in 2022.
Furthermore, Jaiswal informed the court that additional damning revelations regarding the Adani group have emerged through various publications. She alleged that not only did SEBI delay action, but it also introduced a series of amendments seemingly designed to favor Adani, as reported by ANI.
The petitioner contended that these actions could constitute a violation of Rule 19A of the Securities Contract (Regulation) Rules 1957. Rule 19A, introduced by (Second Amendment) Rules in 2010, mandates the maintenance of minimum public shareholding within a specified timeframe. The affidavit added, “These companies would be in clear violation of Rule 19A of the SCRR, 1957, if the 13 suspected overseas entities were/are fronts for the Adani group promoters.”
Recent developments indicate that SEBI has submitted a fresh status report to the Supreme Court of India, revealing that out of the 24 investigations stemming from the Hindenburg report, 22 have reached their final stages, with 2 remaining in interim status, according to ANI.
This investigation was conducted in compliance with the directives of the Supreme Court’s order dated March 2, 2023. The Hindenburg report, published on January 24, had alleged stock manipulation and fraud perpetrated by the conglomerate.
In response to these allegations, the Adani Group has vehemently criticized Hindenburg, labeling them “unethical short sellers” and dismissing their New York-based report as “nothing but a fabrication.”