Hindi English Translation || Editorial || An unclean chit: On the SEBI investigation and Hindenburg Research’s allegations

An unclean chit: On the SEBI investigation and Hindenburg Research’s allegations

The Supreme Court-appointed panel’s report raises fresh questions on the Securities and Exchange Board of India’s functioning

Last Wednesday, the Supreme Court granted the Securities and Exchange Board of India (SEBI) more time to complete its investigation into Hindenburg Research’s allegations of malfeasance (दुष्कृत्य), stock price manipulations and violations of minimum public shareholding requirements in Adani Group firms. Ahead of the Court’s original May 2 limit, SEBI had sought at least six more months, citing complexities and the need to unravel (सुलझाना, खोलना) layered deals it deemed “suspicious”. The market watchdog has now got a three-month reprieve (दण्डविराम करना). But the findings of a six-member expert panel, tasked by the Court to review Indian securities market’s overall regulatory and investor protection framework in the wake of the dizzying (चकित कर) volatility in Adani Group stocks’ prices, do not inspire much hope for an expedient ((of an action) convenient and practical although possibly improper or immoral) closure. On its most vital term of reference — regulatory failure in dealing with the alleged contravention (उल्लंघन) of securities market laws in relation to the Adani Group or other companies — the committee’s findings are far from emphatic (ज़ोरदार).

On the question of stock price manipulation, for instance, SEBI told the Justice A.M. Sapre-led panel that 849 automated “alerts” were thrown up by stock exchanges in the 57 months up to December 2022, resulting in four reports. The first of these reports, in September 2020, attracted SEBI’s attention to some common foreign portfolio investors (FPIs) holding shares across the Adani Group. Juxtaposing (मिलाना) this with earlier complaints, SEBI commenced a formal probe on potential violation of the 25% public shareholding norms in October 2020. SEBI cited Adani Enterprises’ trading data to the panel and said no manipulation was found. But such analyses were still underway for other group stocks, compelling the panel to conclude that “…prima facie”, it won’t be possible to say there has been a “regulatory failure”, even as it stressed that such investigations must be time-bound. Even on the probe into the public share-holding and related party transactions flagged by Hindenburg, the panel’s inference is cautiously (सतर्कतापूर्वक) worded and hints at its own time constraints. “In these circumstances, it would not be possible to return a finding of regulatory failure… There indeed has to be a coherent (सुसंगत) enforcement policy.” The key reason for SEBI drawing a blank in attempts (that began in 2020 and revived after the Hindenburg report) to identify the 42 ultimate beneficiaries behind 13 FPIs with sizeable stakes in Adani Group firms is that the regulator had itself tweaked the FPI norms in 2019 to make this obfuscation (The action of making something obscure, unclear, or unintelligible) possible. Such a self-inflicted ‘chicken and egg’ situation, with capricious (मनमौजी) legislation diverging from enforcement, is rare and must trigger a closer look at SEBI’s approach to its key mandate of protecting investors.

Courtesy: The Hindu

Important Word List With Meaning

1.Malfeasance (Noun)

Hindi Meaning - दुष्कृत्य
English Meaning - Wrongdoing, especially by a public official.

2.Unravel (Verb)

Hindi Meaning - सुलझाना, खोलना
English Meaning - Investigate and solve or explain (something complicated or puzzling)

3.Reprieve (Verb)

Hindi Meaning - दण्डविराम करना
English Meaning - Cancel or postpone the punishment of (someone, especially someone condemned to death)

4.Dizzying (Adjective)

Hindi Meaning - चकित कर
English Meaning - Causing someone to feel unsteady, confused, or amazed

5.Contravention (Noun)

Hindi Meaning - उल्लंघन
English Meaning - An action which offends against a law, treaty, or other ruling.

6.Emphatic (Adjective)

Hindi Meaning - ज़ोरदार
English Meaning - Expressing something forcibly and clearly

7.Juxtapose (Verb)

Hindi Meaning - मिलाना
English Meaning - Place or deal with close together for contrasting effect

8.Cautiously  (Adverb)

Hindi Meaning - सतर्कतापूर्वक
English Meaning - In a way that deliberately avoids potential problems or dangers.

9.Coherent (Adjective)

Hindi Meaning - सुसंगत
English Meaning - (of an argument, theory, or policy) logical and consistent.

10.Capricious (Adjective)

Hindi Meaning - मनमौजी
English Meaning - Given to sudden and unaccountable changes of mood or behaviour

11.Expedient (Adjective)

English Meaning - (of an action) convenient and practical although possibly improper or immoral.

12.Obfuscation (Noun)

English Meaning - The action of making something obscure, unclear, or unintelligible.

13.Inflict (Verb)

English Meaning - Cause (something unpleasant or painful) to be suffered by someone or something.