SEBI takes a bold step forward in Adani probe

The Securities and Exchange Board of India (Sebi) has approached the Organized Crime and Corruption Reporting Project (OCCRP) for “key documents,” as per a leading media report quoting sources.

The request comes as the market regulator is facing challenges in gathering information for its investigation into the Adani-Hindenburg allegation matter.

The documents requested are ones that the OCCRP had previously referenced in a report of the Ahmedabad-based conglomerate. However, OCCRP has declined to provide the documents to Sebi, the report added.

The OCCRP is a network of investigative reporters supported by entities like the United States Department of State and George Soros. Sebi’s move precedes the upcoming Supreme Court hearing on the case, where it had on several occasions sought more time to complete the probe.

The regulator reached out to OCCRP after the investigative journalism group released a report on August 31, alleging that the Adani conglomerate routed funds to foreign individuals to invest in its own shares through Mauritius-based platforms.

“Sebi did contact OCCRP seeking key documents from our investigation. However, our long-standing policy is not to provide any documents beyond what we publish ourselves,” OCCRP said in a statement.

OCCRP however pointed out that advocate Prashant Bhushan, representing one of the petitioners in the Adani-Hindenburg allegations has access to some of the documents.

OCCRP noted that Bhushan had tweeted a key document on September 1, revealing that Sebi was warned by the Directorate of Revenue Intelligence (DRI) in 2014 about alleged stock manipulation.

The DRI alert from January 2014, sent to former Sebi chairman UK Sinha, accused Adani of siphoning off money by overvaluing power equipment imports and investing them in listed companies via entities in Mauritius and Dubai.

Sebi, in its submission to the Supreme Court, highlighted challenges in establishing the economic interest of shareholders linked to certain foreign portfolio investors in Adani companies, located in tax havens. The regulator is still working on gathering details from five overseas jurisdictions.

The Adani Group has consistently denied all allegations made by the Hindenburg research report, asserting that it is a victim of a smear campaign orchestrated by international entities and short-sellers.

The group emphasised that show-cause notices issued by the DRI were quashed by the courts. Despite challenges in obtaining information from foreign jurisdictions, Sebi has not responded to queries.

The OCCRP report in August, based on internal emails and files from tax havens, alleged that Adani associates were controlling opaque shell companies in overseas tax havens that had amassed huge stakes in Adani Group companies.

All this was done in blatant violation of SEBI regulations. The Congress urged SEBI to stand firm and finish its investigation into the Adani matter in a timely manner, even as it reiterated that only a JPC probe can investigate the full scope of the issue. Ironically, Adani Group and its minions in the BJP attempted to discredit OCCRP as ‘Soros-funded interests’.

Now, it emerges that SEBI itself approached OCCRP to get access to the documents proving that Adani was in fact indulging in round-tripping and money-laundering benami funds.

However, will this embolden Adani sympathisers within the BJP and otherwise, including pro-government media who now have a tool to attack SEBI as conspiring with Soros?

Does this prove that SEBI is finally taking these disclosures seriously and attempting to fulfil its duty to the nation, or is it yet another eye wash just to paint a narrative about being neutral, impartial and duty bound to the nation?