The Supreme Court has recently granted an extension to the Securities and Exchange Board of India (SEBI) until August 14th to present a status report on its investigation into the contentious Hindenburg Research report on the Adani Group of companies. This decision came after SEBI, the markets regulator, requested an additional six months to delve into the intricate dealings of the conglomerate, citing their complexity.
During the proceedings, the bench comprising Chief Justice of India DY Chandrachud and Justices PS Narasimha and JB Pardiwala expressed their willingness to accommodate a deadline extension until September 30th. However, they directed SEBI to present an updated report on the investigation’s progress by August 14th, specifically requesting information on which stage the investigation has reached.
This move by the Supreme Court signifies its active involvement in monitoring the ongoing investigation and reflects the significance of the allegations against the Adani Group, as brought forward by the Hindenburg Research report. The court’s decision ensures that SEBI’s inquiry remains on track, keeping the public informed about the latest developments in this high-profile case.
In a recent court session, it was noted that the expert committee has presented their report, and the proceedings were postponed until after the summer break to allow the court to analyze it.
The court has sought the assistance of the expert committee and requested them to engage in further discussions with the committee regarding any additional aspects or suggestions relevant to the case.
During the latest court session, the Securities and Exchange Board of India (SEBI) revealed through a sworn statement that they haven’t conducted any investigations into companies affiliated with the Adani Group since 2016. This statement contradicts earlier allegations.
During today’s hearing, advocate Prashant Bhushan argued that the recent developments were a clear attempt to protect the company in question. He emphasized the importance of obtaining a clear statement regarding the investigation initiated in 2016. Bhushan highlighted that if there were any abnormal increases in Adani shares, such as a significant surge of 5,000%, it should raise alarm bells. He also referred to statements made in parliament in 2021 that supported his arguments.
In response to these contentions, Solicitor General Tushar Mehta stated that the Securities and Exchange Board of India (SEBI) possessed the necessary capabilities and was actively addressing the issue. He dismissed the connection between the 2016 investigation and the Hindenburg Report, asserting that they were entirely different and separate matters. Mehta clarified that the demand to disclose all investigations conducted against a company was beyond the scope of the present case. He further explained that SEBI’s probe, mentioned by the Minister, commenced in 2020 and did not pertain to the investigation initiated in 2016.
This exchange during the hearing highlights the contrasting perspectives on the scope and relevance of the investigations, with Bhushan expressing concerns and seeking transparency, while Mehta maintains that SEBI is adequately handling the matter within its jurisdiction. The arguments presented by both sides shed light on the complexities surrounding the ongoing proceedings and the differing interpretations of the relevant timelines.
The focal point of the current situation revolves around the Hindenburg Research report, which has sparked controversy regarding the Adani Group of companies and raised allegations against the conglomerate.
On March 2nd, the Supreme Court issued an order permitting the Securities and Exchange Board of India (SEBI) to proceed with its investigation. The deadline set for completing this probe was May 2nd.
It is important to note that this particular investigation is separate from the one ordered by the Supreme Court itself, which entrusted an expert committee led by former judge Justice AM Sapre to delve into the matter.
Following the committee’s submission of its report, SEBI requested an extension of time to continue its proceedings.
Presently, the Supreme Court is actively handling four petitions relating to the recent report released by Hindenburg Research, an entity engaged in short-selling. The report alleges fraudulent activities by the Adani conglomerate, specifically regarding the inflation of share prices.
As a consequence of the report, the share value of various Adani companies experienced a substantial decline, reportedly amounting to approximately $100 billion.
During recent proceedings, the bench expressed its inclination to grant SEBI an additional three months to conclude its investigation related to the stock market crash. This duration falls short of the six-month extension sought by SEBI.
Written by – Sohini Chakraborty intern under Legal Vidhiya
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