The Supreme Court is all set to pronounce its verdict on a batch of pleas seeking a court-monitored probe into the allegations made by US-based short-selling firm Hindenburg Research against Indian conglomerate the Adani Group.
The apex court had reserved its judgment on pleas in Adani-Hindenburg row, over allegations of stock price manipulation by the Indian corporate giant, on November 24 last year.
A bench comprising Chief Justice DY Chandrachud and justices JB Pardiwala and Manoj Misra, while pronouncing the judgement today said that the power of the Supreme Court to enter into the regulatory framework of SEBI is limited.
The top court noted that SEBI’s probe in 22 cases pertaining to Adani Group is already complete and asked the markets watchdog to conclude its probe in the remaining two cases within three months.
It also rejected the reliance placed by one of the petitioners on the Organised Crime and Corruption Reporting Project (OCCRP) report to suggest that SEBI was lackadaisical in conducting the investigation.
It further asked the market watchdog and the government to look into whether there is any infraction of law by the Hindenburg report on short selling and if so then take action in accordance with the law.
“A report by a third party organisation without any attempt to verify the authenticity of its allegations cannot be regarded as conclusive proof,” the bench said.
The apex court also rejected the demand for a SIT probe in the case and said that the facts of the case do not warrant the transfer of the probe into the matter to a Special Investigation Team (SIT) or other probe agency.
Adani group has denied all allegations.
Gautam Adani Says Truth Has Prevailed
Billionaire Gautam Adani reacting to the Supreme Court judgment on allegations levelled by a US short-seller against his conglomerate, said that truth has prevailed and his group would continue to contribute to India’s growth story.
“The Hon’ble Supreme Court’s judgement shows that: Truth has prevailed. Satyameva Jayate,” Adani said in a post on X, formerly known as Twitter.
“I am grateful to those who stood by us.” “Our humble contribution to India’s growth story will continue. Jai Hind,” he said.
The Case
The judgement on the PILs, filed by lawyers Vishal Tiwari, M L Sharma and Congress leaders Jaya Thakur, and Anamika Jaiswal, claimed the allegations that the Adani Group, considered close to the Prime Minister Narendra Modi-led government, inflated its share prices and, after the report of the short seller Hindenburg Research, the share value of various group entities fell sharply.
While reserving the verdict, the bench had said it had no reason to “discredit” the Securities and Exchange Board of India (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 SEBI as to what it intends to do in the future to ensure investors don’t lose wealth due to volatility in the 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 the investigation in 22 out of the 24 cases relating to allegations against the Adani group was 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.
What’s The Matter?
The Adani Group stocks got bludgeoned on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate. The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
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