'Why is Sebi quiet on the Adani shares?'

Questions have been raised on the role of Cyril Shroff, who is on the regulator's Committee for Corporate Governance and Insider Trading and is the father-in-law of Karan Adani

Cyril Shroff is the managing partner at law firm Cyril Amarchand Mangaldas
Cyril Shroff is the managing partner at law firm Cyril Amarchand Mangaldas

Aditya Anand

Concerns have been raised about the relationship between a key official at the Securities and Exchange Board of India (Sebi) and the chairman of the company, Adani Group, in light of calls from the opposition for SEBI to investigate allegations of "stock manipulation and accounting malpractices" made by US-based short seller Hindenburg Research. But despite these concerns deserving a response, the markets regulator and others have maintained a continued silence.

Trinamool Congress (TMC) MP Mahua Moitra, tweeted on Friday that Cyril Shroff, a noted lawyer who sits on the Sebi Committee on Corporate Governance and Insider Trading, is related to the businessman Gautam Adani. Paridhi Shroff married Karan Adani, a son of the wealthy Adani family. Moitra suggested that Shroff step down in the event that SEBI opens an investigation.

Karan and Paridhi got married in an elaborate ceremony in Goa in 2013.

Sebi, the markets regulator has maintained stoic silence since the Hindenburg report surfaced on January 25. US short-seller Hindenburg Research released an adverse report on the Adani Group alleging serious stock manipulation and being involved in accounting fraud. The Adani Group has rejected all the charges.

“Greatest respect for ace lawyer Cyril Shroff but his daughter is married to Gautam Adani’s son. Shroff serves on SEBI’s Committee on Corporate Governance & Insider Trading. If at all @SEBI_India is examining Adani’s issue, Shroff should recuse himself. Perceptions are Reality,” TMC MP Mahua tweeted.

In another development S&P Dow Jones Indices has also declared that Adani Enterprises will be dropped from its sustainability indices before January 7. Briefly, the S&P Dow Jones Indices announced that Adani Enterprises would be dropped from the Dow Jones Sustainability Indices after a media stakeholder analysis was prompted by Hindenburg’s allegations of stock manipulation and accounting fraud.

Officials countered by saying the Sebi-appointed corporate governance committee has disbanded after finishing its report. A person familiar with Shroff's participation was quoted by The Mint as saying that Shroff solely worked with the now-defunct Insider Trading Committee, which also issued a report.

In her reaction to the Dow Jones Sustainability Indice declaring that Adani Enterprises shares would be removed from the index as of February 7, 2023, Mahua Moitra asked, "Why is NSE not re-evaluating index membership of Adani stocks?" Taking to Twitter, she wrote, “S&P Dow Jones removes Adani Enterprises from Dow Jones indices due to charges of stock manipulation & accounting fraud. Why is @NSEIndia not re-evaluating index membership of Adani stocks when international ones are?"

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