Lok Sabha Question No. 1889 (UNSTARRED), answered on 2023-03-13
Subject: Investigation into Adani Group of Companies
Ministry: FINANCE
Asked by: Manish Tewari

## Government of India Ministry of Finance

## Department of Economic Affairs

## LOK SABHA

## UNSTARRED QUESTION NO. 1889

## TO BE ANSWERED ON MONDAY, MARCH 13, 2023/ PHALGUNA 22, 1944 (SAKA)

## Investigation into Adani Group of Companies

## 1889. SHRI MANISH TEWARI:

Will the Minister of FINANCE

(a) whether the Adani group is under investigation for violating SEBI Regulations;

b) if so, the details thereof and if not, the reasons therefor;

(c)  whether  the  SEBI has  stated in  an  affidavit before the Supreme Court  that  it  will conduct a detailed  examination  as  per  existing regulatory frameworks  into  the Adani group and  if  so,  the details thereof;

- (d)  the  details  of  the  agenda  of  the  aforesaid  investigation  and  the  proposed  timeline  of  its completion;
- (e)  the  scope/remit  of  the  Committee  to  investigate  the  Adani  Group  as  suggested  by  the Government to the Supreme Court and the reasons for giving such suggestions/names in a sealed cover;

(f)  whether the Supreme Court has rejected the submissions made in sealed cover and if so, the details thereof and the reasons therefor; and

(g) the status of the investigations undertaken by SEBI and DRI into the Adani group as per the answer to Lok Sabha Parliamentary Question dated 19.07.2021 given by the Government?

## ANSWER MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a) &(b):  The  Securities  and  Exchange  Board  of  India  (SEBI),  as  the  statutory  regulator  of securities  markets,  is  mandated  to  put  in  place  regulatory  frameworks  for  effecting  stable operations and development of the securities markets including protection of investors. As per its mandate, it conducts investigations into any alleged violations of its Regulations by any market entity. It is, accordingly, undertaking investigation into the market allegations against the Adani Group of companies.

(c) & (d):  SEBI, in a note submitted to Hon'ble Supreme Court in compliance with its order dated February 10, 2023 in Writ Petition Civil No. 162 of 2023, has apprised the Court that it is already enquiring  into  the  allegations  made  in  the  Hindenburg  report  as  well  as  the  market  activity immediately  preceding  and  post  the  publication  of  the  report,  to  identify  violations  of  SEBI Regulations  including  but  not  limited  to  SEBI  (Prohibition  of  Fraudulent  and  Unfair  Trade Practices relating to Securities Market) Regulations, 2003, SEBI (Prohibition of Insider Trading) Regulations,  2015, SEBI  (Foreign  Portfolio Investors)  Regulations, 2019,  Offshore  Derivative Instruments (ODI) norms, short selling norms, if any.

(e):    In response to the Hon'ble Supreme Court dated February 10, 2023, the Government of India submitted its suggestions on the remit of the Committee proposed to be constituted by the Hon'ble Court. The suggested terms of reference were shared with the petitioners on the directions of the Court and included the following:

- i. To ascertain and submit a report regarding the truthfulness or otherwise of the allegations made against Adani group of companies in the Hindenburg Report;
- ii. To ascertain and  submit a report regarding Hindenburg's admitted  claim of taking a 'short  position  in  Adani  group  Companies  through  US  traded  bonds  and  non-Indian traded  derivatives  instruments'  prior  to  the  publication  of  its  subject  report  with  all underlying  transactions  undertaken/  made  either  by  Hindenburg  itself,  its  associated companies/ concerns and/ or connected entities/ individuals, whether within or outside India in violation of any regulatory/ penal/ preventive or other statutory provisions.
- iii. To ascertain and submit a report regarding the details of all undisclosed 'short position' and/ or other transactions, source of funds and profits made by short sellers in India or abroad prior to and/ or in near proximity of the Hindenburg Report.
- iv. Suggest measures to strengthen investor awareness including at the point of trade.
- v. Suggest measures to strengthen statutory and/ or regulatory framework for further and better protection of investors.

(f): The Hon'ble Supreme Court, vide its order dated 2 nd March 2023, has constituted an Expert Committee for the assessment of the extant regulatory framework and for making recommendations to strengthen it.

(g): In its Order dated 02.03.2023, Hon'ble Supreme Court has directed SEBI to conclude the ongoing investigations within two months.

Investigations pertaining to imports of Power Generation, Power Transmission and Infrastructure (Port & SEZ) Equipment by Adani Group companies have been concluded by DRI and report has been submitted before the relevant judicial authorities. As regards case pertaining to imports of Indonesian coal by Adani Group of Companies, investigations by DRI have not reached finality as information sought from exporting countries through execution of Letters Rogatory (LRs) is under litigation.

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