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Supreme Court agrees to hear Congress leader Jaya Thakur’s plea seeking prosecution of Adani group, clubs it with other petitions

Jaya Thakur also questioned the decision of the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to invest in Adani shares at allegedly inflated prices.

Congress Leader Jaya Thakur has petitioned the Supreme Court, requesting that the Adani Group be prosecuted and put into question the decision of the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to invest in Adani shares at allegedly inflated prices. On 15th February 2023, the Supreme Court today granted Thakur’s request for an inquiry against Adani Group based on charges made by the US-based Hindenburg Research.

Jaya Thakur, who is the General Secretary of Madhya Pradesh Mahila Congress, moved the plea through advocate Varinder Kumar Sharma on Tuesday, and it was mentioned before the CJI on Wednesday.

The petitioner has urged the Supreme Court seeking to set up an investigation against the Adani Group and its associates alleging that they have swindled lakhs of crores of public money and money of the government exchequer. The petition sought the investigation by various investigating agencies CBI, ED, DRI, CBDT, EIB, NCB, SEBI, RBI, SFIO under the supervision and monitoring of a sitting judge of the top Court.

The petition further said that the Hindenburg Research report has put serious question marks on Adani. Further, the finding of the Hindenburg report indicates that the Adani group of companies has inflated the share price of their various companies, and by using the inflated price they have obtained loans worth Rs.82,000 crores from various public and private sector banks. The plea also alleged the company and their associates have set up various offshore shell companies at various tax havens such as Mauritius, Sypris, UAE, Singapore and the Caribbean Islands to transfer money through hawala routes, and did money laundering.

Jaya Thakur further alleged in the petition that “despite glaring and serious violations of the SEBI Act, 1992, neither the Securities and Exchange Board of India (SEBI) nor the Reserve Bank of India (RBI) has taken any action or initiated any investigation against the Adani Group.”

A bench headed by Chief Justice of India DY Chandrachud accepted to hear the plea, and grouped it with other similar petitions demanding a probe into the Hindenburg Research report on the Adani group and scheduled a hearing on February 17. The two other petitions in the matter are filed by advocates Manohar Lal Sharma and Vishal Tiwari.

Solicitor General Tushar Mehta has expressed his reservations to the Supreme Court about forming an expert committee to investigate the Hindenburg Report. He argued in his submission before the Supreme Court, “Existing agencies are fully equipped. However, in responding to your lordship’s suggestions, we have no objection to constituting a committee. The only thing is, we don’t want to send a message that a government agency needs to be overseen by a committee.”

On Friday, 10th February 2023, the Supreme Court ordered the Securities and Exchange Board of India (SEBI) to give a comprehensive report on the issue. The bench, which also included Justices Narasimha and Pardiwala, thus directed that the report include information such as the existing regulatory framework, important causative variables, the need for effective market regulation systems, and so on.

The bench led by CJI Chandrachud recently decided to hear a petition that also requested that a committee overseen by a retired top court judge analyze the Hindenburg Research study. The Supreme Court also heard Advocate ML Sharma’s case, which seeks to make short-selling’ a criminal offence. The claimed petition requests an inquiry into Nathan Anderson, the inventor of Hindenburg, “for exploiting innocent Investors by short selling under the pretence of a fake crash”.

On January 24, a US-based investment research firm called Hindenburg Research released a report titled ‘Adani Group: How The World’s Third Richest Man Is Pulling The Largest Con In Corporate History,’ accusing the enterprise of engaging in a ‘brazen stock manipulation and accounting fraud scheme over the course of decades.’

The disclosure triggered a stock market crash, wiping off over $100 billion from Adani’s business and driving him down the global billionaire list. Furthermore, the revelation came two days before Adani Enterprises’ $2.5 billion follow-up public offering.

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