NEW DELHI: The Supreme Court-appointed panal headed by retired judge A M Sapre investigating the Adani-Hindenburg issue said considering the explanations provided by the Securities and Exchange Board of India (Sebi), supported by empirical data, prima facie, it would not be possible for the Panel to conclude there has been a regulatory failure around the allegation of price.

The Panel said and Exchange Board of India has also found that some companies have taken short positions prior to the publication of the Hindenburg report and have profited from squaring off their positions after the price crashed upon publication of the report.

The committee took note of Sebi's submission that, notwithstanding an increase in the price of Adani Enterprises Ltd. (AEL) shares, no clear pattern of price manipulation could be linked to any one entity or network of related organisations. The committee stated that it was clear that Sebi was actively following market events and price changes.

"It would not be possible to return a finding of regulatory failure...since SEBI has an active and working surveillance framework to take notice of high price and volume movements and has applied itself to the data generated by such surveillance, applying objective criteria, to consider if the integrity of the natural price discovery process has been manipulated," the committee noted.

According to the report, 849 alerts issued by the system in the case of the Adani equities were taken into account by stock exchanges, resulting in four notifications to Sebi—two far before the Hindenburg Report and two after January 24, 2023.

The stock exchanges "considered the factors in all four reports...and, on the surface, found no evidence of any artificiality to the price rise and did not find material to attribute the rise to any single entity or group of connected entities," according to the report.

The committee said, Sebi described the research by using Adani Enterprises Ltd. as an example and segmenting the trade data into four "patches" (amounts of time when the stock price increased dramatically).

In short, the committee found no evidence of repeated "wash trades" or fake trading among the same parties. "The FPIS under examination were net sellers in one of the regions where the price increased. One investor who had bought across the patches had also bought a lot more other stocks. In other words, there was no discernible pattern of dishonest trading, it added.

The Supreme Court's top court set up the expert committee on March 2 of this year. It was chaired by Justice Abhay Manohar Sapre, a former justice, and included O.P. Bhatt, Justice J.P. Devadhar (retired), K.V. Kamath, Nandan Nilekani, and attorney Somashekhar 

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