SEBI advises investors to exercise caution over Hindenburg report – ThePrint – ANIFeed

Mumbai (Maharashtra) (India), August 11 (ANI): The Securities and Exchange Board of India (SEBI) has urged investors to remain calm and conduct thorough analysis before reacting to the Hindenburg Research report.

In a late-night statement, SEBI dismissed the allegations made by the US short seller and said that “the allegations made by Hindenburg Research against Adani Group have been duly investigated by SEBI”.

He further added that even the top court in its order had stated that SEBI had completed investigations in 22 out of 24 cases.

“The Hon’ble Supreme Court in its order dated January 3, 2024, observed that SEBI had completed twenty-two out of twenty-four investigations into the Adani group. Subsequently, another investigation was completed in March 2024 and one remaining investigation is nearing completion.”

The SEBI statement said the ongoing investigation into the latest case was also nearing completion.

“…more than 100 subpoenas, approximately 1,100 letters and emails were issued in this case seeking information. In addition, more than 100 communications were sent to domestic/foreign regulatory authorities and external agencies requesting assistance. In addition, more than 300 documents containing approximately 12,000 pages were examined.”

SEBI states that as per the provisions relating to termination of investigations, before initiating enforcement proceedings, notices are issued requesting evidence and the parties are given an opportunity of hearing.

“Once the investigations are completed, SEBI initiates enforcement proceedings which are quasi-judicial in nature. This involves issuance of show cause notice and opportunity for hearing, which culminates in issuance of a speech order. Such order is then made available in the public domain. In case the investigations are completed, the enforcement proceedings initiated are ongoing and appropriate action is taken as per the applicable securities laws.”

SEBI, in accordance with its policy, refrains from commenting on investigations and ongoing enforcement actions.

SEBI says notice to issue notice to Hindenburg Research on June 27, 2024 was issued after due process of law for violation of securities laws

“It is to be noted that Hindenburg Research itself has made available on its website the Notice of Inquiry issued to it. The Notice of Inquiry sets out the reasons for its issuance. The proceedings in this case are ongoing and are being dealt with in accordance with the established procedure and principles of natural justice.”

The allegations that SEBI (REIT) regulations have benefited a large, international financial conglomerate are that the REIT regulations have been amended from time to time and their implementation has been done after extensive consultations with stakeholders.

“As in all cases involving introduction of a new regulation or amendment of an existing regulation, a robust consultation process has been put in place to seek views and feedback from the industry, investors, intermediaries, the relevant Advisory Committee and the general public. It is only after consultation that a proposal to introduce a new regulation or amend an existing regulation is placed before the Board of SEBI for consideration and deliberation. The regulations are notified after approval by the Board of SEBI. As a transparency measure, the agenda documents of Board meetings and the outcome of Board discussions are also published on the website of SEBI.”

Therefore, claims that such regulations or circulars issued in connection with REITs were intended to favour one large, international financial conglomerate are unfounded.

The market regulator added that in the context of the growth of the Indian securities market, SEBI highlighted the potential of REITs, SM REITs, InvITs and municipal bonds among other assets that were highlighted in the latest SEBI annual report

Therefore, the claim that the promotion of REITs and SM REITs among other asset classes by SEBI was merely aimed at availing the services of one large international financial conglomerate is incorrect.

The announcement also stated that the SEBI Chairwoman had recused herself from participating in matters relating to conflict of laws.

“it is emphasised that SEBI has adequate internal mechanisms to address conflict of interest issues which include a disclosure framework and exemption provisions. It is to be noted that the relevant disclosures required in respect of securities holdings and transfers have been made by the Chairperson from time to time. The Chairperson has also disqualified herself in matters relating to potential conflicts of interest.”

The market watchdog has over the years created a solid regulatory framework that is in line with global best practices and ensures investor protection.

A day after US short-seller Hindenburg Research alleged that SEBI Chairwoman Madhabi Puri Buch and her husband Dhaval Buch had stakes in “both little-known offshore entities used in the Adani money-siphoning scandal”, the SEBI Chairwoman and her husband, acting privately, issued a detailed statement denying the allegations.

This came after they issued a short statement on Sunday in which they accused Hindenburg of tarnishing their reputation.

Earlier on Saturday, US firm Hindenburg Research accused SEBI Chairwoman Madhabi Buch and her husband of having stakes in “both little-known offshore entities that were used in the Adani money-siphoning scandal”.

In January 2023, Hindenburg released a report accusing Adani Group of financial irregularities, leading to a significant drop in the company’s share price. The group rejected the claims at the time.

In January 2024, the Supreme Court had refused to transfer the probe into allegations of share price manipulation by the Adani group to an SIT and ordered regulator SEBI to complete its probe into two pending cases within three months.

Earlier this year, the Supreme Court also dismissed a review petition against a judgment that directed market watchdog SEBI to conduct an inquiry into the Adani-Hindenburg case. (ANI)

This report is generated automatically by ANI news service. ThePrint is not responsible for its content.