Sebi ‘concealed’ DRI alert in 2014 over Adani Group firms, petitioner tells Supreme Court

The Securities and Exchange Board of India (Sebi) allegedly “concealed” a 2014 alert by the Directorate of Revenue Intelligence (DRI) on possible diversion of funds and stock market manipulation by Adani Group companies when the regulator made its status report to the Supreme Court on investigations into the Hindenburg Research findings, according to an affidavit submitted by one of the petitioners in the case.

The Supreme Court had asked Sebi to conduct an enquiry into the fraud and stock manipulation allegations made by Hindenburg against the Adani Group in January. The Adani Group had rejected the findings.

Sebi submitted a status report to the Supreme Court on August 25, saying it had completed the investigation into whether Adani Group companies had violated securities laws.

The capital market regulator had “concealed a January 2014 DRI alert about Adani having siphoned off money and invested them in Adani listed companies through entities based in Dubai and Mauritius,” petitioner Anamika Jaiswal said in her affidavit dated September 8.

The DRI had sent a letter to then Sebi chief UK Sinha on January 31, 2014, saying that “there may be stock market manipulation being committed by Adani Group of companies using the money siphoned off using the modus operandi of overvaluation in the import of power equipment.”

The petitioner also referred to a Sebi probe into violation of the Securities Contracts (Regulation) Rules 1957 by the Adani Group that was conducted from April 1, 2016, to September 30, 2020.

Sebi had denied this in a court filing on May 15, 2023 in response to a court filing by one of the petitioners which said Sebi had been investigating the Adani Group of companies since 2016 in a case pertaining to the issuance of global depository receipts by certain Indian-listed companies.Sebi had told the Supreme Court-appointed Justice AM Sapre committee that its investigations into Adani started only on October 23, 2020, after receiving complaints in June-July 2020.

The affidavit by Jaiswal said that new revelations by the Organised Crime and Corruption Reporting Project show how opaque investment funds based in Mauritius owned and controlled by persons linked to the Adani promoter group had invested and traded in millions of dollars’ worth of Adani companies’ stocks.

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