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Informist, Tuesday, Aug 13, 2024

 

--Plea in SC seeks direction to SEBI to finish Adani-Hindenburg probe

--Plea highlights new report published by Hindenburg Research 
--Plea complains of SC registrar's refusal to register case 

 

NEW DELHI – An application was filed in the Supreme Court today seeking direction to the Securities and Exchange Board of India to finish the pending investigation, and give its conclusion, in the Adani-Hindenburg case. The petitioner, Vishal Tiwari, also highlighted the new report published on Saturday by US-based short-seller Hindenburg Research.

 

Hindenburg Research in its latest report has alleged that SEBI Chairperson Madhabi Puri Buch and her husband held stake in offshore funds which were also allegedly used by Vinod Adani, the elder brother of Adani Group Chairman Gautam Adani, to invest in Indian stocks, including Adani Group companies. This raised the prospect of conflict of interest in SEBI's investigation of the research firm's allegations against the Adani Group in its report of January 2023, the report said.

 

The petitioner said that the SEBI chairperson had denied these allegations as baseless and the apex court had also held that third party reports cannot be considered. "But, this all has created an atmosphere of doubt in the minds of public and investors and in such circumstances, it becomes incumbent for SEBI to conclude the pending investigations and declare the conclusion of the investigations," said the petitioner. 

 

Tiwari has also complained that the Supreme Court registry has refused to register his application. He asked the court to direct its registrar to register his application. Further, Tiwari sought the court to direct SEBI and the government to file a status report on the progress in strengthening Indian investors' interest, based on the suggestions by the Sapre committee. 

 

In March 2023, the top court had formed a six-member committee headed by former Supreme Court judge A.M. Sapre to investigate allegations of stock manipulation against the Adani Group. In its report, the committee said it could not conclude that there was regulatory failure on the SEBI's part in the case. The court asked the government and the SEBI to take into consideration the Sapre panel's recommendations to strengthen Indian investors' interest.

 

Tiwari also sought the court's direction to the government and SEBI to provide a report on the share market crash and loss to investors on Jun 4, the day when the results of the General Election were declared. The Indian equity market saw its biggest intraday crash in over four years on Jun 4 after the trends in the counting of votes showed that Modi's Bharatiya Janata Party was unlikely to get a majority on its own. The benchmark Nifty 50 ended 5.9% lower on the day of the results. The stock market had risen 3.3% the previous day after exit polls predicted the BJP was likely to win the elections comfortably.

 

In the Adani-Hindenburg case, the top court on Jan 3 said there was no ground to transfer the SEBI's probe either to a special investigation team or the Central Bureau of Investigation. It refused to give any directions or interfere with the SEBI's jurisdiction, noting that the latter's regulations do not suffer from any infirmities. Noting that the SEBI has completed investigation in 20 out of 22 matters in the Adani-Hindenburg case, the apex court directed the market regulator to complete its probe in the remaining two cases within three months. However, the SEBI is yet to submit a final report in the case.

The top court had heard four petitions by advocates Vishal Tiwari, M.L. Sharma, and Congress leader Jaya Thakur, and Anamika Jaiswal filed in the wake of Hindenburg's report accusing Adani Group companies of "pulling the largest con in corporate history". Shares of Adani Group companies had crashed after the US-based short seller Hindenburg Research had published its report in January 2023.  End

 

Reported by Surya Tripathi

Edited by Aditya Sakorkar

 

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