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The Supreme Court on Wednesday granted the Securities and Exchange Board of India (SEBI) time till August 14 to complete its probe into the allegations of stock price manipulation by the Adani group.
A bench headed by Chief Justice D Y Chandrachud also directed the SEBI to file an updated status report on the investigation.
The bench, also comprising Justices PS Narasimha and JB Pardiwala, directed a copy of the report of the apex court-appointed Justice A M Sapre committee, which was submitted to it recently, be made available to the parties to enable them to assist the top court in the matter.
It has listed the matter for further hearing on July 11.
"Sebi is granted an extension of time till August 14, 2023 to submit its report," the bench said.
The remit of the Sapre panel was to provide an overall assessment of the situation, including the relevant causal factors which have led to volatility in the securities market in the recent past.
The panel was asked to suggest measures to "(i) strengthen the statutory and/or regulatory framework; and (ii) secure compliance with the existing framework for the protection of investors", the court said.
The market regulator had sought an extension of six months to complete the probe into allegations of stock price manipulation by the Adani group.
Solicitor General Tushar Mehta, appearing for the SEBI, told the bench the six-month period was "compressed" by the regulator taking a realistic view of the matter and urged it to re-consider the August deadline.
"You tell us what you have done because we had already granted you two months.
“We have granted you now further extension of three months which makes it five months.
“So, effectively you are asking for six months.
“We have granted you already five months," the CJI said.
"We are not granting an indefinite extension of time.
“If there is some genuine difficulty, you let us know," Justice Chandrachud told Mehta.
Mehta requested if the time given for wrapping up the investigation could be extended till the end of September.
"Mr solicitor, we have two options.
“We could have given you time right now until September 30.
“Alternatively, you tell us on affidavit say by August 15 what is the position.... We have not specifically dealt with each individual issue but we have said that you will give us an updated status report on the course of the investigation...," the CJI said.
On May 15, the SEBI had told the apex court that it was not investigating the Adani group since 2016 and termed such claims as "factually baseless".
The investigation mentioned in its earlier affidavit pertained to the issuance of Global Depository Receipts (GDRs) by 51 Indian firms and no listed company of the Adani group was among them, it had said.
On May 12, lawyer Prashant Bhushan, appearing for one of the petitioners, had opposed the plea for extension of time, saying Sebi was seized of some kind of investigation in the matter since 2016.
The fresh affidavit filed in the court had said the application for extension of time filed by Sebi is meant to ensure "carriage of justice keeping in mind the interest of investors and the securities market" since any incorrect or premature conclusion of the case arrived at without full facts and material on record would not serve the ends of justice and hence be legally untenable.
It had said the 'investigation' referred to in its earlier reply affidavit has “no relation and/or connection to the issues referred to and/or arising out of the Hindenburg report..."
The Sebi, in its affidavit, had said it has already approached 11 overseas regulators under the Multilateral Memorandum of Understanding (MMOU) with the International Organisation of Securities Commissions (IOSCO) with respect to its investigation into Minimum Public Shareholding (MPS) norms and the first such plea was made as early as October 6, 2020.
"Various requests for information were made to these regulators.
“The first request to overseas regulators was made as early as October 6, 2020.
“A detailed note has been submitted to the expert committee constituted by this court covering the steps taken, responses received and the current status of information gathering under the MMOU of IOSCO," it had said.
The affidavit said in respect of the investigation relating to 12 transactions referred to in the Hindenburg Report, prima facie it is noted that these transactions are highly complex and have many sub-transactions across numerous jurisdictions.
A rigorous investigation of these transactions would require the collation of data or information from various sources including bank statements from multiple domestic as well as international banks, and financial statements of onshore and offshore entities involved in the transactions and contracts, it said.
The top court had on May 12 said it would consider granting three more months to Sebi for concluding its probe into the allegations of stock price manipulation and lapses in regulatory disclosure by the Adani group.
The apex court had on March 2 asked SEBI to probe within two months the allegations against the Adani group and also set up a panel to look at providing protection to Indian investors after a damning report by US short-seller Hindenburg wiped out more than $140 billion of the Indian conglomerate's market value.
It had also ordered setting up of a six-member committee headed by former apex court judge Justice A M Sapre to investigate the issue.
Till now, four PILs have been filed in the top court on the issue, including by lawyers M L Sharma and Vishal Tiwari and Congress leader Jaya Thakur.
Adani Group stocks had taken a beating on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.
The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.