New Delhi: Hearing petitions seeking probe into the findings of the Hindenburg Research report, the Supreme Court on Friday asked the central government and the Securities and Exchange Board of India (Sebi) to suggest measures to protect Indian investors in future. The court took note of the loss of several lakh crore rupees suffered by Indian investors due to fall in share prices of Adani group companies due to the allegations.
A bench comprising Chief Justice of India (CJI) DY Chandrachud and Justices PS Narasimha and JB Pardiwala said, “It is said that the total loss by Indian investors is several lakh crores… How do we ensure that they are safe?” How do we ensure that this does not happen in future What role should be envisaged for SEBI in future?
The court also expressed concern over “ensuring that the regulatory mechanism within the country is duly strengthened so as to protect Indian investors from the sudden volatility that has been witnessed in the recent 2 weeks.”
It then directed SEBI to file a detailed response on how a more robust mechanism could be put in place, and suggested that in its response “the existing regulatory framework, the relevant causal factors, put in place a robust mechanism to protect investors”. need to” is included. , TeaHe also proposed setting up of an expert committee to suggest ways to strengthen the existing regulatory framework and give wider powers to SEBI.
The matter has now been adjourned to February 13, with the bench clarifying that its observations shall not be construed as a reflection on the discharge of statutory functions by SEBI or any other regulatory authority.
The controversy stems from a report released last month by Hindenburg Research titled ‘Adani Group – How the World’s Third Richest Man is Pulling the Largest Cone in Corporate History’. In the report, the New York-based short-seller accused the Adani group of engaging in a “decade-long brazen stock manipulation and accounting fraud scheme”.
publication of report the resulting Seven listed companies of the Adani Group lost an estimated $110 billion in cumulative stock market value.
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Petitions on the Adani-Hindenburg row
Relying on its two-year-long investigation, Hindenburg Research said it had evidence of various irregularities in the group’s finances.
It accused the Adani group of operating several shell companies, often offshore, “stock parking/manipulation through Adani’s private companies on the balance sheets of listed companies to maintain the appearance of financial health, and to perform a number of functions including anti-laundering” and solvency”.
The group responded by publishing a 413 page answerDenying the allegations and terming the report as a “planned attack on India”.
Against this backdrop, the Supreme Court made the observation while hearing two public interest litigations on the findings in the report.
one of the following petition Advocate ML Sharma had sought a direction to SEBI and the Ministry of Home Affairs (MHA) to investigate and register an FIR against Hindenburg Research founder Nathan Anderson and his associates in India. also demanded that the work ofshort sellingbe declared a fraud.
second petition was filed Advocate Vishal Tiwari sought formation of a committee headed by a retired Supreme Court judge to probe the allegations leveled in the report.
The petition highlighted the fact that the publication of the report caused huge losses to various Indian investors. It also claimed that after the “unprecedented attack on billionaire Gautam Adani’s vast empire by Hindenburg”, the market value of all 10 Adani stocks halved, causing huge losses of Rs 10 lakh crore to investors.
(Editing by Amritansh Arora)
Read also: The market has won and now it is up to Adani to decide whether he will lose or not