The Securities and Exchange Board of India has asked the Supreme Court to extend by six months the deadline to submit its report on the investigation into the allegations of stock price manipulation and accounting fraud levelled against the Adani group by US-based short seller Hindenburg Research.

The market watchdog was supposed to submit its report by May 2.

Sebi’s application sparked protests from the Opposition, with Congress general secretary Jairam Ramesh expressing the fear that this could be a devious move to defuse a powder keg.

“Hope this request by Sebi is not an effort to bury the scam or drag it out in the hope that the furore will die down,” Ramesh said on Twitter.

If the apex court extends the deadline, the Modi government may be spared a potential source of embarrassment from the report’s contents spilling into the public domain at a time when it is bracing for a series of tough state elections that will stretch to January next year.

The Karnataka elections are due on May 10.

Sebi said it needed more time to investigate charges against the Adani group for “misrepresentation of financials, circumvention of regulations and/ or fraudulent nature of transactions”.

In its application, the market regulator is learnt to have told the apex court that it would normally take at least 15 months to complete a rigorous investigation into 12 suspicious transactions that have been cited in the Hindenburg report. However, it is looking to complete the probe within six months.

More than 80 separate charges were made against the Adanis in the Hindenburg report, which came out on January 24.

It wasn’t immediately clear which of the 12 transactions the market regulator is investigating.

Sebi has urged the apex court to “pass an order extending the time to conclude the investigation as directed by this court by the common order dated March 2 by a period of 6 months or such other period as this court may deem fit and necessary in the facts and circumstances of the present case”.

The market regulator has reportedly told the Supreme Court that the transactions it is probing are complex and have many sub-transactions.

A thorough investigation will entail obtaining bank statements from overseas lenders as well as detailed financial statements from the listed entities of the group.

“This is a joke,” tweeted Trinamul Congress MP Mahua Moitra who had submitted a litany of complaints against the Adani group along similar lines that pre-dated the Hindenburg report.

She said: “@SEBI_India has been investigating since October 2021 when they replied to my letter of July. While they prima facie see violations (no surprise)-they want 6 months to protect their favorite businessman so that he can get maximum time to cover up.

“The SEBI Chairperson told the Committee that the Adani matter is the elephant in the room. Surely then it deserves to be treated with greater urgency given the free run this particular ‘haathi mere saathi’ has had in all these years of Mitr Kaal.”

On March 2, the apex court had directed Sebi to probe “whether there was any manipulation of stock prices in contravention of existing laws”.

It had asked the market regulator to “expeditiously conclude the investigation within two months and file a status report”.

Late last month, Sebi chairperson Madhabi Puri Buch had declined to comment on the Adani issue saying the matter was sub judice.

“We never comment on entity-specific matters as a policy, and on top of that, the matter is before the Supreme Court. We never comment on sub judice matters. We will follow the advice of the apex court. We are duty-bound to follow whatever the highest court of the land has said,” Buch had said while addressing the media after a board meeting of the market regulator.

Market slide

The Hindenburg report had precipitated a slide in the market value of the 10 listed entities belonging to the Adani group. At one stage, the combined market value of the Adani group stocks had lost almost $140 billion.

The Adani group stocks have clawed back some of the losses since then after the group started to pre-pay dollar bonds floated by its companies. But it is still a long way off from the stratospheric levels that these stocks had reached late last year, turning Gautam Adani — often labelled a crony capitalist close to Prime Minister Narendra Modi — into one of the richest tycoons in the world.

On March 2, the Supreme Court had also appointed a panel headed by retired Justice A.M. Sapre to look into the various regulatory aspects of the stock markets, including the crash in the Adani group stocks following the Hindenburg report.

The panel was asked to submit its report in a sealed cover within two months. It is not known how this investigation has progressed and whether this panel will also press for an extension.

Earlier this month, a Reuters report had said that Sebi was probing possible violation of “related party” transaction rules in the Adani group’s dealings with at least three offshore entities that have links to Vinod Adani, the elder brother of founder Gautam Adani.