Adani: 6 entities under lens for suspicious trading: SC panel on Adani crash


NEW DELHI: The Committee of Experts appointed by the Supreme Court, headed by former SC Judge AM sapphire emphatically stated that Sebi did not commit any regulatory failure during the sharp rise in share prices of Adani Group companies between March 2020 and December 2022 and their dramatic collapse following the publication of the Hindenburg report on January 24.
The committee, which submitted its report to the Supervisory Committee, said it found no evidence that the price increase of Adani The share sales during the period involved unusual trading or participation in the purchase or sale of shares in the group companies by 12 foreign portfolio investors (FPIs) suspected of being associated with the group, against which, since October 2020, allegations of alleged Violations are determined with a minimum participation rate of 25% (MPS).

However, Sebi investigated whether there was an unusual pattern of trading around the release of the Hindenburg report between January 18 and 31. While there were no negative observations regarding Adani scrips in the cash segment, there were suspicious transactions “observed by six companies,” it said.
“These are four FPIs, other than the 12 FPIs suspected of being associated with the Adani group and under investigation for violations of MPS norms, as well as one entity and an individual. The trading pattern (adopted by these six) is suspicious because of the building up of short positions…in the Adani positions prior to the Hindenburg report and substantial gains made by offsetting their short positions after the Hindenburg report was released scored…” she added.
LIC sold 50L AEL shares for ₹300 and bought 4.8 cr for ₹1,031-3,859: Panel
An analysis by the Supreme Court’s panel of experts, chaired by a former SC judge Am Sapre Adani Enterprises (AEL) stock trading history in four stages between March 1, 2020 and December 31, 2022, a month before the publication of the Hindenburg report and the collapse of Adani stock showed that LIC was the biggest loser as it sold 50% lakh AEL shares when prices fluctuated around Rs.300 and bought 4.8 crore AEL shares when prices ranged from Rs.1,031 to Rs.3,859.
After a detailed examination of the price movements of Adani shares and their sale and purchase by various companies, the Committee found no evidence of price manipulation of shares by companies affiliated with the Adani Group or others. It stressed that LIC chose to sell shares in the group when others, including large mutual funds and FPIs, were buying large amounts of them, and that Adani-affiliated companies accounted for only a tiny fraction of the trading volume.
Trading in AEL shares has been analyzed over four time periods – Patch I: 1 March 2020 to 31 August 2020; Patch II: September 1, 2020 to September 30, 2020; Patch III: October 1, 2020 to March 31, 2021; and Patch IV: April 1, 2021 to December 31, 2022.

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