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.
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.
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.
“This is a chance for them to come out and say: You know what? It’s not going to happen again,’” said Sharmila Gopinath, specialist advisor India at the Asian Corporate Governance Association. “You need deep reform, you need regulators who are strong enough to enforce the rules.”
Byzantine Web
Even though the Adani Group has repeatedly refuted these claims, the ensuing market selldown has wiped $100 billion off the market value of its listed entities.
The Adani Group has always maintained that it is fully compliant with disclosures required under Indian laws, while Mauritius Minister of Financial Services and Good Governance, Mahen Kumar Seeruttun, told Bloomberg in February that there has been no breach of regulations in his jurisdiction.
The Supreme Court-initiated investigation into allegations against the Adani Group — and the broader regulatory framework surrounding it — is unprecedented for Indian businesses.
Probes into corporate blow-ups, such as the 2009 audit scam in Satyam Computers, a banking scam by diamantaire Nirav Modi in 2018 and the collapse of the Infrastructure Leasing and Financial Services Group, were led by sector regulators. Culpability was either confessed by the company managements or there were defaults that compelled regulators to step in.
Runaway Valuations
Adani stocks’ runaway valuations were “constantly under question but not its assets,” said Amit Tandon, managing director of proxy advisory, Institutional Investor Advisory Services India Ltd.
“The lesson is that we perhaps need better disclosures on beneficial ownership and regulatory mechanisms to trace money flows,” Tandon said.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Education News Click Here
For the latest news and updates, follow us on Google News.