Complete Investigation In Adani-Hindenburg Matter Within Two Months: SC To SEBI

Today, 2 March, a bench comprising of the CJI along with Justices PS Narasimha and JB Pardiwala directed the SEBI to complete the investigation in the Adani-Hindenburg matter within a period of two months and subsequently file its status report.

The bench has noted that the stand of SEBI is that it is already investigating into the allegations of the Hindenburg report as well as the market activity which occurred after the publication of the Hindenburg report.

The bench has directed the SEBI to also investigate the following, as a part of its ongoing investigation:

(a)  Whether there is a violation of Rule 19(a) of the Securities Contract Regulation Rules,

(b)  Whether there is a failure to disclose transactions with related parties and other relevant information which concerns related parties to the SEBI in accordance with law;

(c)   Whether there was any manipulation of stock prices in contravention of existing laws

In addition to the aforesaid, the bench has also decided to form an expert committee to analyse if the regulatory mechanism needs to be strengthened to protect Indian investors from the kind of market volatility which was witnessed following the release of the Hindenburg Research report against the Adani Group.

The committee will be headed by former SC Judge AM Sapre, and will also consist of OP Bhat (former SBI Chairman), Justice JP Devadhar, Nandan Nilakeni, KV Kamath and Somasekharan.

The committee will be required to submit its report in a sealed cover within two months. The remit of the committee is to suggest measures to strengthen statutory frameworks and to investigate Adani Group.

The SEBI Chairperson has been directed to ensure that all the necessary information is provided to the Committee.

The bench noted that the case concerns loss of investor wealth over the past few weeks due to the steep decline of Adani group companies, precipitated by the Hindenburg Research report which alleged manipulations and malpractices by the Adani Group.