The Supreme Court Thursday, March 2, directed market regulator SEBI to complete in 2 months its enquiry proceedings in the Hindenburg research report on the Adani Group of companies and submit the status report in a sealed envelope before the court within the stipulated time frame.
It asked SEBI to investigate whether the Adani Group of companies have violated Section 19 of SEBI rules and whether there was any manipulation of stock prices, as alleged in the Hindenburg research report.
In the wake of the Adani-Hindenburg row, to review the regulatory mechanism, the apex court bench comprising Chief Justice of India (CJI) DY Chandrachud, Justice PS Narasimha, and Justice JB Pardiwala also constituted an expert committee consisting of OP Bhat, Justice Devdhar, KV Kamath and Nandan Nilekani. The committee will be headed by former Supreme Court judge Abhay Manohar Sapre.
CJI DY said that SEBI shall apprise the court of its progress and also inform the expert committee of the progress. He added that the constitution of the committee does not hamper the independence of SEBI and its probe processes.
The bench noted that the report alleged that Adani manipulated share prices. The report further said Hindenburg Research took a short position in the Adani shares as well. The bench further noted that the complaints address the loss of investor capital over the last few weeks as a result of the steep decline of Adani group companies, caused by the Hindenburg Research report, which alleged manipulations and malpractices by Adani group companies. It is in this background these petitions have been filed, said CJI DY Chandrachud.
SC declined to gag media reporting on the issue
Notably, earlier the apex court made it clear that it will not issue an injunction against the media in connection to the recent Hindenburg Research report on the Adani Group of firms and its market impact.
Pronouncing the decision Chief Justice of India (CJI) DY Chandrachud said there is no question of gagging the media till the court pronounces the order. “We are not going to issue any injunction to the media ever. We will pronounce orders shortly,” the CJI said.
The apex court was responding to a plea filed by Adv ML Sharma on February 3. The plea had sought a gag order to prevent media from carrying statements or allegations related to the Adani group firms unless they are filed with and verified by market regulator SEBI.
Adani-Hindenburg row: SC rejects centre’s sealed cover suggestions over expert panel
On Friday, February 17, the Supreme Court turned down the Centre’s suggestion in a ‘sealed cover’ regarding a proposed panel of experts recommending steps to tighten regulatory measures in order to minimise any loss to Indian investors due to market volatility, as witnessed during the Adani-Hindenburg row.
Notably, the SC has been hearing four petitions regarding a report written by short-seller Hindenburg Research, alleging conglomerate fraud that cost the Adani Group losses of over $100 billion in market value.
The Adani Group equities have suffered on the stock exchanges following a slew of accusations from Hindenburg Research against the corporate behemoth, including illegal transactions and share-price manipulation. The Adani Group has denied the accusations, claiming that it abides by all legal and transparency obligations.