Statement of the Shri Jairam Ramesh, General Secretary (Communication): The Supreme Court judgment today on certain matters relating to transactions by the Adani Group has proven extraordinarily generous to SEBI, not least by extending its original investigation deadline of 14 August, 2023, by another three months to 3 April, 2024. It is noteworthy that SEBI has failed to complete its investigation into the violation of securities laws and stock manipulation by the Adani Group and its associates ten months after the Supreme Court’s expert committee asked it to do so. It is unclear what will change in the next three months other than the Model Code of Conduct for the Lok Sabha elections coming into effect.

Meanwhile, a series of exposés from credible news sources has turned the glare on the Adani Group’s illicit activities conducted under SEBI’s benign gaze. The most recent revelations include:

31 August, 2023:The OCCRP reveals the actual ownership of two of the 13 benami shell companies that SEBI has failed to identify despite years of “investigation”. Chang Chung-Ling and Nasser Ali Shaban Ahli held 8-14% of benami holdings in Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power and Adani Transmission. This was via shell companies in Mauritius, UAE and British Virgin Islands in blatant violation of SEBI’s minimum shareholding laws. 12 October, 2023: The Financial Times shows how coal trading firms controlled by Chang Chung-Ling and Mohamed Ali Shaban Ahli siphoned out Rs 12,000 crore by over-invoicing coal imported by the Adani Group to Mundra Port in Gujarat. The two exposés established a clear link between money flowing out from the pockets of Indian coal utilities and electricity consumers and the funds flowing into Adani Group companies, in complete violation of SEBI rules relating to minimum ownership as well as stock manipulation.

The Court is right to observe that news reports are not a substitute for a proper SEBI investigation. However, it is concerning that SEBI has asked for extension after extension while the media has produced exposé after exposé.

Those describing this judgement as a “clean chit” are the same as those who described the Expert Committee report as a “clean chit”. The Expert Committee had pointed out that SEBI had in 2018 diluted and subsequently, in 2019, entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds. This had tied its hands to the extent that “the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations… It is this dichotomy that has led to SEBI drawing a blank worldwide,” the Expert Committee had stated.

It is also worth noting that, regarding the Modani Mega Scam, SEBI’s mandate is limited to violations of securities regulations. For instance, look into how the Modi government manipulating bidding conditions over the objections of the NITI Aayog and Finance Ministry to hand Adani a complete airports monopoly, and has misused the ED and CBI to force critical national assets into the hands of the PM’s cronies. Or whether the PM forced the State Bank of India to sign an MoU to lend Adani US$1 billion over a lunch meeting, or how the Modi government has forced important neighbouring countries to hand over critical projects to the PM’s favourite businessman. It will not investigate how the Shri Devendra Fadnavis moved heaven and earth to hand over the Dharavi Redevelopment Project to Adani at very favourable terms, or how Adani has been allowed to inflate consumers’ electricity bills. To get to the bottom of the Modani Mega Scam, nothing less than a JPC will do.

Our fight for NYAY against crony capitalism and its ill-effects on prices, employment and inequalities will continue even more forcefully. Wednesday, January 3, 2024