New Delhi, Feb 6 (PTI) Congress leader Manish Tewari on Monday wrote to SEBI chief Madhabi Puri Buch seeking a thorough probe into allegations made against Adani group in the Hindenburg report, and said a proper investigation is a litmus test of India’s financial oversight paradigm. Drawing Buch’s attention to the recent capital market events regarding the Adani group stocks which have seen a meltdown on stock exchanges in the wake of Hindenburg charges, Tewari said the events have impacted the stock market rather deleteriously and may have an adverse bearing on the health of the country’s economy.
The report by the US-based research group, Hindenburg Research, alleging stock price manipulation and accounting fraud by the Adani Group of Companies, needs to be properly investigated to establish the veracity of these assertions or otherwise so that the people of India and especially the investor community know the unvarnished truth, he said.
“A proper enquiry is a litmus test of India’s financial oversight and regulatory paradigm,” he said.
“… I am not insinuating any alleged wrongdoing or even remotely endorsing any external reports on the Adani Group of Companies. Nevertheless, the matter of beneficial ownership of these shares is under question and it is within SEBI’s ambit and powers to investigate these issues fairly without fear or favour,” the Lok Sabha Congress MP from Anandpur Sahib said.
Sharing the letter on Twitter, Tewari said it “pertains to regulatory and oversight remit of the capital markets regulator”.
He said multiple reports have also been published by international media outlets regarding the Adani stock issue. These reports, if also not properly investigated, could potentially and perhaps adversely impact the trust and confidence of foreign and domestic investors who are interested in investing in Indian markets.
He also said it has come to his notice that the Securities and Exchange Board of India (SEBI) has ostensibly conducted investigations against the Adani Group of Companies with regard to compliance with SEBI regulations, and the Directorate of Revenue Intelligence (DRI) had purportedly begun investigating certain entities belonging to the Adani Group under the relevant laws.
“It would, perhaps, be appropriate if the status of the SEBI investigation and its findings could be made public…,” he said.
The Congress MP said the Hindenburg Report alleged that many of the funds invested in the listed Adani companies’ universe concealed their ultimate beneficial ownership with nominee directors. Noting that SEBI has asked Designated Depository Participants (DDPs) operating within Indian banks to update the beneficial ownership details of the foreign portfolio investors on-boarded as their clients by September 30, he said the time frame given till September 30 seems too remote and must be advanced to an earlier date to ensure a timely disclosure to restore investor confidence.
“I would, therefore, respectfully urge you to act imminently and take appropriate and urgent steps to stem the slide and restore investor confidence in the oversight and regulatory mechanisms of our capital markets,” the Congress leader said.
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