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Supreme Court of India held that they don’t support a transfer of investigation  from SEBI and also dismissed the unfounded accusations of conflict of interest  against the members of the Expert Committee.  

The Court had also not found any justification to order SEBI to withdraw the  modifications it made to the LODR(Listing Obligations and Disclosure  Requirements) Regulations, 2015and FPI (Foreign Portfolio Investments)  Regulations, 2014, which it enacted using its assigned legislative authority . 

Of the 24 investigations assigned to SEBI regarding examining the claims made  against the Adani group, 22 have been concluded by them. Taking note of the  guarantee provided by the Solicitor General on behalf of SEBI, SEBI is ordered by  court to promptly, ideally, conclude the two ongoing investigations in three  months. 

The court denied reliance on the Organized Crime and Corruption Reporting  Project report to imply that SEBI conducted the investigation in a careless manner  by stating that a report from a third-party entity that makes no effort to confirm the  veracity of its claims cannot be used as definitive evidence. 

Concerns concerning the sharp drop in investor wealth and the volatility of the  stock market as a result of a drop in the share prices of the Adani Group of  Companies were expressed in a number of writ petitions that were filed before  Supreme Court in February 2023 . The crisis was allegedly brought up by a study  about the financial dealings of the Adani company that Hindenburg Research  published on January 24, 2023. The study included allegations that the Adani  group had broken securities laws and SEBI regulations by manipulating share  prices and withholding information about transactions with linked parties and other  pertinent information. 

To investigate these allegations the court consulted Solicitor General over the intended  formation of an Expert Committee for this purpose. The formation of an Expert  Committee, with former Court judge Justice Abhay Manohar Sapre serving as  its chairman. The Committee was to consist of the following members in addition  to its chairperson: Mr. OP Bhatt, Mr. KV Kamath, Mr. JP Devadhar, Mr. Nandan  Nilekani, and Mr. Somasekhar Sundaresan. The Expert Committee and SEBI will  cooperate with one another in the investigation process, the Court made clear.  

In general, the petitioner argued for two directives: first, that a SIT be established  to supervise the SEBI investigation into the Adani group and that all such  investigations be subject to court oversight; and second, that SEBI be instructed to  revoke specific modifications made to the SEBI i.e. FPI and LODR Regulations by  submitting the findings of Hindenburg and OCCRP Report. But the court  dismissed the findings claiming it to the need for conclusive proof. 

CASE NAME: Vishal Tiwari v. Union of India & Ors. 


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