Adani-Hindenburg row: SC directs SEBI to complete probe in pending cases within 3 months

The top court delivered its verdict on a batch of petitions on the Adani-Hindenburg row over allegations of stock price manipulation by the Indian corporate giant.

While pronouncing the verdict, the CJI said the power of the top court to enter SEBI’s regulatory domain was limited.

The judgment on the PILs, filed by lawyers Vishal Tiwari, ML Sharma, Congress leader Jaya Thakur, and Anamika Jaiswal, was reserved on 24 November 2023.

Meanwhile, reacting to the Supreme Court verdict Gautam Adani wrote on his X handle: “The Hon’ble Supreme Court’s judgement shows that: Truth has prevailed.”

The Hon’ble Supreme Court’s judgement shows that:

Truth has prevailed.
Satyameva Jayate.

I am grateful to those who stood by us.

Our humble contribution to India’s growth story will continue.

Jai Hind.

— Gautam Adani (@gautam_adani) January 3, 2024

Can’t rely on newspapers: SC

According to the Wire, The court also mentioned the investigation carried out by the Organised Crime and Corruption Reporting Project (OCCRP) after the release of the Hindenburg Research report, saying that it was rejecting reliance on it, as “Reliance on newspaper reports and third party organisations to question the statutory regulator does not inspire confidence. They can be treated as inputs but not conclusive evidence to doubt SEBI probe.”

The Adani Group stocks plummeted 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 had complied with all laws and disclosure requirements.

Also read: If Centre has nothing to hide, why no JPC?, asks Sachin Pilot

The Hindenburg report

On 24 January 2023, the Hindenburg Research report accused the Adani group of “brazen stock manipulation” and “accounting fraud scheme”.

The report said that the business was “pulling the largest con in corporate history.” The Adani Group denied all accusations.

Investigations by the OCCRP and Financial Times, among others, brought attention to the purported wrongdoings by the Adani Group after the release of the Hindenburg Research study. These investigations focused on the company’s suspected use of offshore havens.

The OCCRP on 31 August last alleged that hundreds of millions of dollars were invested in publicly traded group stocks through Mauritius-based “opaque” investment funds managed by partners of the promoter family, charges the conglomerate denied vehemently.

Shares of Adani Group, which denied all allegations, likening the US investment firm’s report to an attack on India, fell after the Hindenburg report was published on 24 January 2023.

Also read: SC directs SEBI to complete probe into Adani group by 14 August

Supreme Court Committee

The Supreme Court on 2 March ordered the setting up of a six-member committee headed by former apex court judge Justice AM Sapre to look into various regulatory aspects for stock markets, including the recent Adani Group shares crash triggered by Hindenburg Research’s fraud allegations.

A bench of Chief Justice DY Chandrachud and Justices PS Narasimha and JB Pardiwala said the panel would make an overall assessment of the situation, suggest measures to make investors aware, and also strengthen existing regulatory measures for stock markets.

The bench also directed the Centre, financial statutory bodies and the SEBI chairperson to render all cooperation to the panel which will have to submit its report within two months.

While reserving its order, the top court, on 17 February 2023, refused to accept in a sealed cover the Centre’s suggestion on a proposed panel of experts.

The Supreme Court, on 17 May, granted the Securities and Exchange Board of India (SEBI) time till 14 August to complete its probe into the allegations of stock price manipulation by the Adani group. The time was then extended.

(With PTI inputs)