The Supreme Court appointed expert committee headed by its former judge Justice Abhay Manohar Sapre on Friday informed the top court that it did not have enough material to conclude that there was a regulatory failure on the part of Securities and Exchange Board of India (SEBI) or that the prices of Adani stocks were manipulated.

 The committee had been entrusted with the task to suggest measures to secure compliance with the existing framework for the protection of investors, to prevent any future short-selling of stocks and enhance the investors’ awareness.

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The expert committee has said that the material provided by the securities market regulator showed that it had its suspicions regarding Adani and had been probing the company since 2020 much before the Hindenburg report on the group came on January 24.

 “SEBI had been investigating Adani since 2020 i.e., before Hindenburg but its suspicions remained just that with the regulatory body unable to establish any links between FPIs who had invested in the company with the promoters of Adani or their company,” says the expert committee.

The committee said that it would not comment any further on this as SEBI had sought more time to complete the probe.

 The market regulator has maintained that its suspicion cannot be translated into a firm case of prosecuting an allegation of violation of the law, the committee report said.

 It has further said that the material, placed before the committee, suggested that SEBI had come to a finding that though on paper the company had been compliant, there may have been a violation of the spirit of the law.

 The committee has concluded that the ownership of FPIs had moved in one direction and enforcement by SEBI in the other.

 The committee said that the volatility in Adani was nothing extraordinary, but was almost on par with the volatility shown by stock exchanges after covid.

“The adverse impact on Adani stock prices stood mitigated with measures such as the Adani group promoters paring down debt raised, secured by encumbrances on their shareholding, and infusion of fresh investment into Adani stocks by way of purchase of shares worth nearly USD 2 billion by a private equity investor from the promoters of the Adani group.”

 Besides Justice Sapre who heads the expert committee, other members of the committee are retired Bombay High Court judge Justice JP Devadhar, former SBI Chairman OP Bhatt, former ICICI Bank chief KV Kamath, Infosys co-founder Nandan Nilekani and securities and regulatory expert Somasekhar Sundaresan.