India’s market regulator has sought a six-month extension to complete its probe into possible lapses in securities market laws and regulatory disclosures by the Adani group.
The Securities and Exchange Board of India (SEBI) filed its request with the Supreme Court on Saturday.
It blamed complex transactions by the conglomerate’s listed, unlisted and offshore entities that require deeper investigation.
Adani insisted in a statement that the group was fully compliant with all laws, rules and regulations. “We are fully cooperating with SEBI and will continue to provide all our support and cooperation,” it said.
SEBI did not respond to a Reuters request for comment.
The Supreme Court asked the regulator to conduct an inquiry into Adani after US-based short-seller Hindenburg Research raised concerns around its governance practices in a report in late January.
The group, whose main business is infrastructure, has said Hindenburg’s report was baseless and called its allegations “unsubstantiated speculations.”
The court had given the regulator until May 2 to submit its report.
In its application, the regulator said it needed more time “to conduct a proper investigation and arrive at verified findings”.
It is investigating alleged breach of related party transaction rules, public shareholding norms and share price manipulation.
Related party transaction rules lay down practices to be followed when two connected parties are involved in a transaction, while public shareholding norms set out the minimum shareholding of an exchange-listed company required to be held by the public.
‘More investigation necessary’
SEBI, in its application, said that further investigations are necessary in cases where preliminary findings point to violations of securities laws.
The application does not disclose details of the violations.
The regulator said that it had received information from several Adani group entities. However, this needs to be independently verified and additional information has been sought from offshore regulators, since some of the transactions under scrutiny involve offshore entities, it said in the court document.
In recent weeks, Adani has been moving to cut the debt level of various group entities, given the massive damage to its credibility from the Hindenburg report, which slashed more than $100 billion off the group’s combined market cap.
Meanwhile, analysts have said the latest move by SEBI does little to boost confidence in India’s market oversight or the Modi government given the Hindenburg revelations occurred three months ago and the regulator appears to have moved at a lethargic pace.
- Reuters with additional editing by Jim Pollard