The Supreme Court on Wednesday granted three months to SEBI to investigate two out of four cases on a batch of petitions on the Adani-Hindenburg row over allegations of stock price manipulation by the Indian corporate giant. A bench comprising Chief Justice D Y Chandrachud and justices J B Pardiwala and Manoj Misra are reading the judgement. The Apex court also ruled that 'till now' no concrete evidence has come out against Gautam Adani.
While pronouncing the verdict, the CJI said the power of the top court to enter the regulatory domain of the Securities and Exchange Board of India (SEBI) was limited. The judgment on the PILs, filed by lawyers Vishal Tiwari, M L Sharma, Congress leader Jaya Thakur, and Anamika Jaiswal, was reserved on November 24 last year. Supreme Court has also directed SEBI to complete its probe of two pending cases out of 24 in the Adani-Hindenburg issue within 3 months. The SC directed the government and SEBI to consider acting on recommendations made by the court-appointed panel.
What is the case
The judgement on the PILs, filed by lawyers Vishal Tiwari, M L Sharma and Congress leader Jaya Thakur, and Anamika Jaiswal, was reserved on November 24 last year.
The pleas claimed the allegations that the Adani Group, considered close to the Modi government, inflated its share prices and, after the report of the short seller Hindenburg Research, the share value of various group entities fell sharply.
It While reserving the verdict, the bench had said it has no reason to "discredit" SEBI, which probed allegations against the Adani group, as there was no material before it to doubt what the market regulator had done. It said the court does not have to treat what was set out in the Hindenburg report as a "true state of affairs". It had asked the Securities and Exchange Board of India (SEBI) as to what it intends to do in the future to ensure investors don't lose wealth due to volatility in stock market or short-selling.
"We don't have to treat what is set out in the Hindenburg report as ipso facto (automatically) a true state of affairs. That is why we directed the SEBI to investigate. Because for us to accept something which is in the report of an entity, which in not before us and whose veracity we have no means of testing, would really be unfair," the bench had said.
Senior lawyer Prashant Bhushan had argued that SEBI's role in the matter was "suspect" for several reasons because a lot of information was available to the regulator way back in 2014. Solicitor General Tushar Mehta, appearing for the SEBI, had told the bench that there was "a growing tendency of planting stories outside India to influence things and policies inside India". Mehta had said that investigation in 22 out of the 24 cases relating to allegations against the Adani group were over. One of the PILs had alleged that changes to the Securities and Exchange Board of India Act (SEBI Act) provided a 'shield and an excuse' for the Adani Group's regulatory contraventions and market manipulations to remain undetected.
The top court had then asked the SEBI to independently investigate the matter and constituted a committee of experts headed by former SC judge Justice AM Sapre. The Adani Group stocks got bludgeoned on the bourses after the Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.
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