The Supreme Court has appointed a six-member expert committee to look into the Adani-Hindenburg case, the members include top bankers, judges, a prominent lawyer and a technology stalwart.
AMN / Business Desk
The Supreme Court has set up an expert committee to review the extant framework of the stock market’s regulatory mechanism, following the sharp slide in shares of listed Adani Group companies after US short seller Hindenburg Research’s January 24 report.
The Supreme Court bench, led by Chief Justice of India DY Chandrachud, has appointed six members as part of the expert committee. It includes OP Bhatt, Justice JP Devadhar, KV Kamath, Nandan Nilekani and Somasekhar Sundaresan, and will be headed by Former Supreme Court judge Justice AM Sapre.
The committee, comprising bankers, judges, a lawyer and a tech stalwart, is likely to look at several aspects related to the Adani-Hindenburg matter.
WHAT EXPERT PANEL WILL DO
The remit of the Committee will include:
- Provide overall assessment of situation, including causes and factors which led to volatility in securities market in recent past.
- Suggest measures to strengthen investor awareness.
- Investigate if there’s been regulatory failure in dealing with alleged contravention of laws pertaining to securities market in relation to adani group and other companies.
- To suggest measures to strengthen the statutory and regulatory framework and secure compliance with the existing framework for the protection of investors.
The court has requested the Chairperson of Sebi to ensure that all requisite information is provided to the committee.
All agencies of the Union government, including agencies connected with financial regulation, fiscal agencies and law enforcement agencies have been asked to cooperate with the committee. The committee is at liberty to seek recourse to external experts.
On February 10, the apex court had said the interests of Indian investors need to be protected against market volatility in the backdrop of the Adani Group stock rout and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look into strengthening the regulatory mechanism.
During a hearing on February 17, the central government had expressed apprehension that any unintentional message to the investors that regulatory bodies in India needed monitoring by a panel may have an adverse impact on the flow of money into the country.
Adani Group stocks have taken a beating on the bourses after US-based shortseller firm Hindenburg Research made a litany of allegations, including fraudulent transactions and share-price manipulation, against the business conglomerate.
The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
The Centre had told the bench that it wanted to provide details such as names and the scope of the panel’s mandate in a sealed cover .
Stock market regulator SEBI, in its note filed in the top court, had indicated it is not in favour of banning short-selling or sale of borrowed shares, and said it is investigating allegations made by a tiny short-seller against the Adani Group as well as its share price movements.
Till now, four PILs have been filed in the top court on the issue by lawyers M L Sharma, Vishal Tiwari, Congress leader Jaya Thakur and Mukesh Kumar, who claims to be a social activist.
Tiwari, in his PIL, sought a direction to the Centre to constitute a committee monitored by a retired apex court judge to inquire into the Hindenburg Research report which has made a slew of allegations against the business conglomerate led by industrialist Gautam Adani.
Another PIL filed by advocate M L Sharma sought prosecution of short-seller Nathan Anderson of the US-based Hindenburg Research and his associates in India and the US for allegedly exploiting innocent investors and the “artificial crashing” of the Adani Group’s stock value in the market.
Congress leader Thakur, in his plea, has sought an investigation under the supervision of a sitting apex court judge against the Adani Group of companies in light of the allegations.
The fourth PIL seeks a probe by multiple central government agencies under the supervision of a panel or a former apex court judge against the Adani Group following allegations of fraud and share price manipulation.
“Direct appropriate audit (transactional and forensic audits), inquiry and investigation by appropriate agencies such as Serious Frauds Investigation Office (SFIO); Registrar of Companies (RoC); Securities and Exchange Board of India (SEBI); ED (Directorate of Enforcement) on money-laundering aspect; I-T (Income-Tax Department on aspects of offshore transactions and tax-havens involved and DRI( Department of Revenue Intelligence),” the fourth plea said.
Besides seeking a direction to the Centre and its agencies to render cooperation in the probe, the PIL has sought a direction to appoint a retired judge of the apex court or a committee to oversee and monitor the inquiry and investigation.
Adani Group stocks have taken a beating on the bourses after the Hindenburg Research made a litany of allegations, including fraudulent transactions and share-price manipulation, against the business conglomerate. The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.