Adani shortseller saga probe to test Sebi, SC check on the rich & powerful

Adani shortseller saga probe to test Sebi, SC check on the rich & powerful

India’s top court and markets regulator are facing their biggest opportunity to show the country’s determination to police its most powerful companies as they investigate the bombshell allegations lobbed at the Adani Group by Hindenburg Research.

 

A six-member expert panel — set up at the Supreme Court’s direction on March 2 to look into any regulatory failures and suggest reforms for investor protection — has filed its report to judges in a sealed cover, according to a person familiar with the development who did not want to be identified as the information is private. The court may open it on Friday, this person said, when the matter comes up for hearing again.  

The court had also asked the Securities and Exchange Board of India, or SEBI, in early March to separately investigate Hindenburg’s accusations of corporate fraud, which the group has denied. The regulator is requesting a six-month extension beyond the two-month deadline as it seeks more financial details locally and overseas.

 

With India’s Prime Minister Narendra Modi largely silent on the controversy despite attacks from opposition parties, these investigations are the most significant way India can signal to the investors that it is willing to scrutinize its largest firms and align them closer to global standards of corporate governance. The Supreme Court is weighing in after a slew of public interest petitions were filed.

The expert panel, staffed with veteran Indian bankers, retired judges and technology tycoon Nandan Nilekani, was told by SEBI that there’s little threat to investors from Adani companies, said a person familiar with the matter. Most of the firms in the ports-to-power conglomerate have posted robust earnings, and there are no signs of further market volatility, the person said.