Virendra Pandit
New Delhi: The Supreme Court on Thursday directed market regulator SEBI to complete an investigation within two months into the allegations of the Hindenburg Research against the Adani Group companies and set up a high-level committee to review regulatory mechanisms and protect investor interests in the light of the US-based short-sellers’ January 24 report that triggered a rout in the group companies’ share prices.
The committee will be led by former apex court judge A. M. Sapre. Its members will be former SBI Chairman O.P. Bhatt, Justice J.P. Devadhar (Retired), former Infosys chief Nandan Nilekani, top banker K.V. Kamath, and ace lawyer Somasekhar Sundaresan. It will submit a status report in a sealed cover within two months.
Reacting to the SC ruling, Adani welcomed its order of a time-bound probe into the Hindenburg allegations against his group, saying the truth will prevail.
“The Adani Group welcomes the order of the Hon’ble Supreme Court. It will bring finality in a time-bound manner. The truth will prevail,” he tweeted shortly after the three-member bench, headed by Chief Justice of India D.Y. Chandrachud, passed the order.
“This court noted that there was a need for the committee for regulatory mechanisms to ensure the safety of investors,” the Chief Justice said while delivering the order.
The SC bench, also comprising Justices P. S. Narasimha and J.B. Pardiwala, directed the Securities and Exchange Board of India (SEBI) to probe whether there has been a failure to disclose related party transactions.
“SEBI shall also investigate whether there has been a violation of Section 19 of SEBI rules (SEBI’s power to issue directions), or whether there was any manipulation of stock prices,” the CJI said.
The court noted that SEBI is already investigating the allegations made by Hindenburg Research against the Adani Group. “SEBI said it was enquiring into market activities immediately “preceding and post the publication of the report”, to detect if there were violations of its regulations,” said the CJI.
During the previous hearing on February 17, the apex court had refused to accept the Centre’s suggestion to submit the proposed names of the expert committee members in a sealed cover to examine the Hindenburg report against the Adani Group and its impact on the markets.
“We will select the experts and maintain full transparency. If we take names from the government, it would amount to a government-constituted committee. There has to be full (public) confidence in the committee.”