Hindenburg-Adani issue: Expert panel submits report to SC in sealed cover

A special three-judge bench of the Supreme Court led by the Chief Justice of India (CJI) DY Chadrachud is scheduled to take up the expert committee’s report on May 12.

The apex court will also hear stock market regulator SEBI's plea seeking six months extension to complete the probe in the same Adani stocks crash matter.

On March 2, the Supreme Court, led by Chief Justice of India DY Chandrachud, had instructed the market regulator Securities and Exchange Board of India (SEBI) to conclude its investigation into the Adani-Hindenburg case and present its findings within two months.

The top court noted that various other aspects of the case need to be examined apart from what the regulator is investigating in the matter.

"Sebi must investigate if there has been violation and manipulation of stock pricing," the Supreme Court bench underscored.

Additionally, the court has constituted a panel of six experts to evaluate the current regulatory mechanism of the stock market.

The committee is led by former Supreme Court judge, Justice AM Sapre, and includes members such as OP Bhatt, Justice JP Devadhar, KV Kamath, Nandan Nilekani, and Somasekhar Sundaresan.

SEBI had on April 29 moved the SC, seeking a six-month extension to complete its probe into Hindenburg allegations of “brazen stock manipulation” and an “accounting fraud” by the Adani Group.

It was opposed by the petitioner, Vishal Tiwari, who had said that this six-month time limit should not be given to SEBI. The SC should direct the SEBI to expedite the probe as soon as possible, Tiwari said.

SEBI said that it needed more time, as the investigation is complex and requires additional time to ensure that all aspects of the allegations are thoroughly examined.

There are 12 suspicious transactions for possible violations related to misrepresentation of financials, and fraudulent nature of transactions, the SEBI said in its petition filed before the Supreme Court.

SEBI's plea to the Supreme Court said that its preliminary findings on several possible violations by the Adani Group include, misrepresentation of financials, fraudulent transactions, disclosure norms, corporate governance norms, minimum public shareholding norms, and stock price manipulation.

The SEBI has also said that it arrived at a prima facie view based on trading in Adani stocks before and after the Hindenburg report, including possible violations of foreign portfolio investment (FPI) norms, overseas direct investment (ODI) norms, insider trading regulations, and norms on short selling.

The SEBI said that the deadline to submit the status report to the Supreme Court is May 2, the SC had said in its March 2 order, which also asked SEBI to “expeditiously conclude” the investigation within two months and file a status report.

Supreme Court in its verdict on March 2, had said it was constituting a committee into the Adani-Hindenburg issue and it will be supervised by an SC-appointed six-member panel, including O P Bhat, Justice JP Devdhar, K V Kamat, Nandan Nilekani and Somasekhar Sundaresan and the committee will be headed by Justice (Former) Abhay M Sapre.

This case is related to a string of petitions filed in the top court following a significant decline in the market value of ten listed companies within the Adani Group, which followed the release of an explosive January 24 report by the US-based short seller, Hindenburg Research.

The Supreme Court received at least four petitions in relation to the Adani-Hindenburg case. Some of these petitions have raised doubts about the authenticity of the Hindenburg report, while others have urged an inquiry into the report's conclusions and the creation of an independent committee of experts to investigate the matter.

(With UNI inputs)