It is disappointing that Securities Exchange Board of India (SEBI) should seek a six-month extension to submit its findings to the Supreme-Court appointed committee, on allegations levelled by US short-seller Hindenburg against the Adani group. If the group is not guilty, it would be in its best interests to clear the air on the issue at the earliest.

Adani group shares have witnessed significant value erosion after the report and this looming issue has made both debt and equity fund-raising an uphill task. Many of India’s mission-critical projects, ranging from the transition to green energy, to the port and airport infrastructure buildout, hinge on the Adani’s group’s fortunes.

Hindenburg allegations

If Hindenburg’s allegations, which range from creating offshore shell entities to launder and round-trip funds, to manipulating public float and share prices, do turn out to be (partly or fully) true, SEBI would be better off concluding its probe before the money trail grows cold.

Among India’s financial sector regulators, SEBI has been the most proactive in looking out for investor interests. It has not shied away from hauling up some of the biggest names in corporate India for market infractions — be it penalising the ADAG group for round-tripping, finding Reliance Industries for share price manipulation or dismantling the Sahara group’s illegal fund-raising.

So, even if SEBI takes the view that money-laundering is the Enforcement Directorate’s remit, it certainly ought to be concerned over allegations that the public shareholding of listed Adani companies is held by related parties masquerading as FPIs.

Litmus test

The truth is that SEBI has been quite intent on plugging round-tripping through the FPI route in recent years, cracking down on multi-layered vehicles and uncovering the ultimate beneficial ownership of FPIs investing here.

This is why the Adani case is a litmus test for SEBI to demonstrate that it owes its institutional allegiance to the Parliament and Indian public, and to no one else.