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What TV doesn't, print can't; we deliver.
SEBI advised investors to remain calm and exercise due diligence, noting that the Hindenburg’s report includes a short position disclaimer.
NEW DELHI: The Securities and Exchange Board of India (SEBI) has responded to the August 10, 2024, report by Hindenburg Research, which raised questions about SEBI’s handling of the Adani Group investigation.
In an official statement, SEBI advised investors to “remain calm and exercise due diligence, before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report.”
The Hindenburg report criticized SEBI for its actions regarding the Adani Group, alleging that the regulator had not taken significant action against the conglomerate and had issued a show-cause notice to Hindenburg Research on June 27, 2024. It also questioned SEBI’s amendments to the SEBI (REIT) Regulations 2014, claiming these changes benefitted a large multinational financial conglomerate.
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In its response, SEBI emphasized its thorough investigation into the Adani Group. The Supreme Court’s January 2024 order noted SEBI had completed 22 out of 24 investigations, with one more finished in March 2024 and the final investigation nearing completion.
Clarifying its stance, SEBI said, “…more than 100 summons, around 1,100 letters and emails have been issued to seek information. Further, more than 100 communications have been made seeking assistance from domestic/foreign regulators and external agencies. Also, more than 300 documents containing around 12,000 pages have been examined.”
Regarding the SEBI (REIT) Regulations, SEBI defended its regulatory changes, asserting, “a robust consultation process for seeking inputs and feedback of the industry, investors, intermediaries, relevant Advisory Committee and the public at large is in place. Only after consultation, a proposal for introduction of a new regulation or change in the existing regulation is placed for the consideration of and deliberation of the SEBI Board.”
Adding on, the statement read, “As a measure of transparency, the agenda papers for Board meetings and outcomes of Board discussions are also published on SEBI website. Hence, claims that such regulations, changes to regulations or circulars issued related to REITs were to favour one large multinational financial conglomerate, are inappropriate.”
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SEBI also addressed concerns about potential conflicts of interest involving its chairperson. It stated that there are robust internal mechanisms, including “disclosure frameworks and provisions for recusal”, to manage conflicts of interest. The Chairperson has made the required disclosures and recused herself from matters where conflicts could arise.
Affirming its dedication to maintaining transparency, the pronouncement said, “SEBI, over the years, has built a robust regulatory framework that not only aligns with best global practices but also ensures protection of investors.”
