Adani-Hindenburg Issue: SEBI Seeks Six-Month Extension To Complete Probe, Says Report

SEBI, India's market regulator, has requested a six-month extension to complete the Adani-Hidenburg issue.

India's market regulator has requested a six-month extension to complete its investigation into possible violations of securities market laws and regulatory disclosures by billionaire Gautam Adani's Adani group, according to a court document seen by news agency Reuters. On Saturday, the Securities and Exchange Board of India (SEBI) filed its request with the Supreme Court, citing complex transactions involving the conglomerate's listed, unlisted, and offshore entities that necessitate further investigation. 

According to the news agency, neither SEBI nor the Adani group responded immediately to requests for comment.

After US-based short-seller Hindenburg Research raised concerns about Adani's governance practises in a January report, the Supreme Court directed the regulator to conduct an investigation. The group, whose primary business is infrastructure, has dismissed Hindenburg's report as "unsubstantiated speculations."

The court had set a deadline of May 2 for the regulator to submit its report.

The regulator stated in its application that it needed more time "to conduct a proper investigation and arrive at verified findings."

It is looking into possible violations of related party transaction rules, public shareholding norms, and share price manipulation.

Related party transaction rules specify the procedures to be followed when two connected parties are involved in a transaction, whereas public shareholding norms specify the minimum shareholding of an exchange-listed company that the public must hold.

In its application, SEBI stated that additional investigations are required in cases where preliminary findings point to violations of securities laws. The application does not provide any information about the violations, the report said. 

According to the regulator, it received information from several Adani group entities. However, this needs to be independently verified, and additional information has been requested from offshore regulators because some of the transactions under investigation involve offshore entities, according to the court document.