The decision by the Securities and Exchange Board of India (SEBI) to mandate enhanced disclosure requirements for some foreign portfolio investors (FPIs) point to a “clear admission of guilt” by the market regulator in the wake of the Supreme Court’s expert committee recommendations, the Congress said on June 30.
In a statement, Congress general secretary Jairam Ramesh asserted that SEBI’s investigation has limited scope and only a joint parliamentary committee (JPC) probe can fully unravel “the Adani scam”.
His statement followed the SEBI board approving a proposal to amend the FPI rules on Wednesday. Under the proposed framework, FPIs with concentrated single group equity exposures or significant equity holdings will be mandated to make additional granular disclosures.
“The Supreme Court’s expert committee used soft but damning language regarding SEBI’s approach to the Adani mega scam. It claimed that there was no regulatory failure by SEBI but rather ‘piquantly’ went on to describe a number of major regulatory failings, including the rewriting of rules that allowed opaque overseas funds to be invested in Adani companies in huge quantities. The reintroduction of strict reporting rules following the SEBI board’s 28 June, 2023 meeting represents a public admission of guilt by the regulatory body,” Mr. Ramesh said.
The Congress leader said they are also awaiting the SEBI report slated for August 14 that would answer key questions on the origins of the ₹20,000 crore “opaque foreign funds” flowing into the Adani group of companies.
Mr. Ramesh said that SEBI accepts that it needs to do more to prevent the “circumvention of regulations such as the requirement for Minimum Public Shareholding”, precisely the allegation made against the Adani Group.
“Despite desperate attempts by interested parties to paint the expert committee’s report as a ‘clean chit’, all the actions taken subsequently by SEBI indicate an admission of guilt and a belated attempt to increase transparency regarding financial flows,” he said.
