Probe into the Adani-Hindenburg issue to be fast-tracked; SC sets up committee

New Delhi: The probe into the Adani-Hindenburg issue will be fast-tracked with the Supreme Court on Thursday setting up a committee to look into the regulatory mechanism in the light of Adani-Hindenburg report.

The court also directed the Securities and Exchange Board of India (SEBI) to complete its ongoing investigation within a period of two months and file a status report before the Court.

The SEBI will examine whether there was any manipulation of stock prices in contravention of existing laws and whether there was a violation of Rule 19(a) of the Securities Contract Regulation Rules. It will also investigate whether there was a failure to disclose transactions with related parties and other relevant information which concerns related parties to the SEBI in accordance with law.

The committee set today has been asked to submit its report in a sealed cover before the court within 2 months. Headed by retired justice Abhay Manohar Sapre, former judge of the Supreme Court, it will provide an overall assessment of the situation and the causal factors that led to the volatility in the security markets.

The committee will suggest measures to strengthen investors’ awareness and also investigate whether there has been regulatory failure in the alleged contravention of laws pertaining to the securities markets in connection with Adani group or other companies, it added. The SEBI shall also inform the expert committee the action it has taken in furtherance of the directions as well as the steps taken as part of the ongoing investigation.

The apex court noted that the cases concern the loss of investor wealth over the past few weeks because of to the sharp decline of Adani group companies, following the release of by the Hindenburg Research report which alleged manipulations and malpractices by the Adani group companies. The bench also noted that the Hindenburg had stated that it had taken a short position in the Adani group shares.

After the court decided on February 17 to set up the committee, the Central Government sent names in sealed cover
for inclusion in the proposed committee, but the apex court had rejected the proposal. The top court had said the court will select experts and maintain full transparency, and if the court were to take names suggested by the central government, then it would amount to a government constituted committee.

The court orders came during the hearing of the PILs filed by Advocate Vishal Tiwari, Advocate ML Sharma, Congress leader Jaya Thakur and Anamika Jaiswal.Tiwari and Sharma sought investigation against the Hindenburg report for causing losses to Indian investors, whereas the petitions of Thakur and Jaiswal sought investigation against Adani group on the basis of the allegations made in the Hindenburg report. (With IANS inputs)

—-INDIA NEWS STREAM