- Last Wednesday, the Supreme Court granted the Securities and Exchange Board of India (SEBI) more time to complete its investigation into Hindenburg Research’s allegations of malfeasance, stock price manipulations and violations of minimum public shareholding requirements in Adani Group firms. Ahead of the Court’s original May 2 limit, SEBI had sought at least six more months, citing complexities and the need to unravel layered deals it deemed “suspicious”.
- The market watchdog has now got a three-month reprieve. But the findings of a six-member expert panel, tasked by the Court to review Indian securities market’s overall regulatory and investor protection framework in the wake of the dizzying volatility in Adani Group stocks’ prices, do not inspire much hope for an expedient closure.
- On its most vital term of reference — regulatory failure in dealing with the alleged contravention of securities market laws in relation to the Adani Group or other companies — the committee’s findings are far from emphatic.
- There indeed has to be a coherent enforcement policy.” The key reason for SEBI drawing a blank in attempts (that began in 2020 and revived after the Hindenburg report) to identify the 42 ultimate beneficiaries behind 13 FPIs with sizeable stakes in Adani Group firms is that the regulator had itself tweaked the FPI norms in 2019 to make this obfuscation possible.
- Such a self-inflicted ‘chicken and egg’ situation, with capricious legislation diverging from enforcement, is rare and must trigger a closer look at SEBI’s approach to its key mandate of protecting investors.
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB