Adani-Hindenburg issue: Supreme Court adjourns hearing, asks SEBI to circulate report

New Delhi [India]: The Supreme Court on Tuesday adjourned the hearing on various petitions pertaining to the Hindenburg Research’s report on Adani Group.

A bench headed by Chief Justice of India DY Chandrachud adjourned the hearing observing that SEBI has filed a response to the report to the expert committee yesterday and but was not circulated. The apex court asked the financial market regulator SEBI to circulate the court-appointed committee’s report.

Solicitor General Tushar Mehta apprised the apex court about receiving of the report of the expert committee and SEBI response to the expert committee report. He said that SEBI report was filed late yesterday and therefore it was placed before the bench.

The Supreme Court has earlier gave three more months till August 14, 2023, to Securities and Exchange Board of India (SEBI) to conduct probe into the Hindenburg’s allegations.

On March 2, the apex court directed the capital market regulator SEBI to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report, which led to a massive wipeout of more than USD140 billion of the Adani Group’s market value.

The January 24 Hindenburg report alleged stock manipulation and fraud by the conglomerate.

Supreme Court, on March 2, set up an expert committee on the issue arising from the Hindenburg Research report on Adani Group companies. The committee consisted of six members, headed by former apex court judge Justice AM Sapre.

The top court had then asked SEBI to file a status report within two months.
The apex court was then hearing petitions pertaining to the Hindenburg report, including on the constitution of a committee relating to regulatory mechanisms to protect investors’ interests.

On Monday, SEBI has placed on record before the Supreme Court the recommendations given by the top-court appointed expert committee to look into the issue relating to Hindenburg report.

SEBI, in its application, apprised the top court about the recommendations made by the top-court appointed expert committee which suggested violations of securities laws demand prompt action so as to limit the negative impact on the securities market.

SEBI said that the expert committee recommends Robust Settlement Policy and put in place a coherent policy on settlement of proceedings whereby financial injury commensurate with the alleged violation may be inflicted on the party and resources need not be expended where a settlement is possible.

SEBI urged the SC to pass an appropriate order taking into consideration the views/ observations of SEBI on the Report of the Expert Committee.

The Supreme Court-appointed expert committee has earlier filed its report relating to Hindenburg matter and informed the Supreme Court that at this stage, taking into account the explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the Committee to conclude that there has been a regulatory failure around the allegation of price manipulation.

The committee, in its report, said that its remit is not to examine whether the price rise was justified, whereas its remit is to ascertain if there was a regulatory failure.