Probing Hindenburg charges against Adani, Sebi tells Supreme Court – Times of India

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By Amit

NEW DELHI: Markets regulator Sebi on Monday told the Supreme Court that it is comprehensively probing the Hindenburg Research report allegations against Adani Group companies, as also movement of share prices pre- and post-publication of the report, using its powers under three regulations and norms governing offshore derivative instruments (ODIs) and short-selling.
In a note submitted by solicitor general Tushar Mehta to a bench led by CJI DY Chandrachud, the regulator said, “Sebi is already enquiring into both, the allegations made in the Hindenburg report as well as the market activity immediately preceding and after the publication of the report, to identify violations of Sebi regulations.”
“As the matter is in early stages of examination, it may not be appropriate to list details about the ongoing proceedings at this stage,” it said.
In principle opposing the review of the existing market regulatory framework, Sebi said the PILs in the SC are on the price fluctuations of shares of a single group of companies, which had “no significant impact at market-wide level or at system-wide level to warrant a system-level review of regulatory frameworks in operation”.
“The entity-level issues that have arisen have had a significant impact at the entity level and warrant detailed examination by the regulator, which has already been actioned,” the Sebi said.
It discussed both, the negligible impact of Adani Group company shares on stock markets and the modus operandi of short-sellers like Hindenburg. “While shares of the (Adani) group have seen significant declines in prices on account of selling pressure, the wider Indian market has shown full resilience. The combined weight of the (Adani) group companies in sensex is zero and in Nifty is below 1%,” Sebi said.
It said short-sellers like Hindenburg, a US-based company, do research on companies that they believe have governance and/or financial issues.

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