Adani-Hindenburg verdict: The Supreme Court ruled that SEBI had not been indolent in its investigation and declined to move the case from SEBI to SIT.
There will be no SIT to probe into the stock manipulation allegations against Adani Group. SEBI will continue its investigation, the Supreme Court said. (REUTERS)
The Supreme Court rejected to establish a SIT (Special Investigation Team) to look into the accusations against the Adani Group on Wednesday, which is a significant relief to the Securities and Exchange Board of India (SEBI) and the Adani Group. The court stated that SEBI will continue its investigation because there is no evidence to support the claim that SEBI was incompetent. The Supreme Court ruled that it could not delve into the regulatory framework and that the Hindenburg report or anything similar could not be used as justification for directing an independent investigation. The top court ordered SEBI to complete its investigation within three months, however SEBI would proceed with its investigation in accordance with the law.
On up to four petitions, a bench made up of Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra rendered decisions. Lawyers Vishal Tiwari and ML Sharma, along with Congressmen Jaya Thakur and Anamika Jaiswal, submitted the petitions.
The court stated in reading the decision that the supreme court’s authority to intervene in SEBI’s regulatory framework is restricted. No justifiable reason was presented to order SEBI to reverse the modifications it made to the FPI and LODR regulations. Twenty out of twenty-two matters have been concluded by SEBI. The order stated that it will wrap up the probe in the remaining two cases in three months.
The order stated that the OCCPR report could not be used to cast doubt on the SEBI probe. It stated that reliance on an OCCPR report is rejected and that relying on a report from a third party organization without any form of verification is not acceptable as evidence.
“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 order said.
What was the SEBI-Adani-Hindenburg case?
The petitioners claimed that the Adani Group’s regulatory violations and market manipulations were covered up by SEBI, which was looking into the allegations against the Adani Group. The Supreme Court then established an expert committee led by former SC judge Justice AM Sapre and requested that SEBI conduct an impartial investigation into the situation.
Solicitor General Tushar Mehta, representing SEBI, said the court during the case hearing that there was “a growing tendency of planting stories outside India to influence things and policies inside India”.
The Adani Group was accused by Hindenburg Research of engaging in dishonest business dealings and manipulating share prices. The accusations were denied by the Adani Group as untrue.