Supreme Court of India Clears SEBI Investigation in Adani-Hindenburg Case

The Adani-Hindenburg Case: The Supreme Court of India has stated that there is no basis to doubt the SEBI investigation; it will not interfere with the Hindenburg decision. The Supreme Court declined to transfer the examination of SEBI’s findings, stating that there is no deficiency in SEBI’s investigation.

Granting relief to the Adani Group, the Supreme Court of India said on Wednesday that it cannot enter the domain of regulatory governance, and ordering a separate investigation based on the Hindenburg report or any such manner cannot be justified. SEBI will proceed, and according to the law, it will continue its investigation. There is no material to show that there was any deficiency in taking steps, the top court said, ordering SEBI to conclude its investigation within three months.

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Chief Justice DY Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Mishra, among others, delivered a verdict on four petitions. The petitions were filed by lawyers Vishal Tiwari, M.L. Sharma, and Congress leaders Jaya Thakur and Anamika Jaiswal.

Reading the verdict, the court said that the Supreme Court’s power is limited to entering the framework of SEBI’s regulator. No valid basis was found to direct SEBI to cancel its amendments to FPI and LODR regulations. SEBI has completed its investigation in 20 out of 22 cases. The order stated that it would complete the investigation in the remaining two cases within three months. The order said, “The OCCPR report cannot be ignored to cast doubt on SEBI’s investigation. Dependence on the OCCPR report has been rejected, and reliance on the report of a third-party organization cannot be considered as evidence without verification,” it said.

The order further stated, “Newspaper reports and dependence on third-party organizations do not inspire confidence to question the legal regulator. They can be considered as inputs, but there is no decisive evidence to doubt SEBI’s investigation,” the order said.

What was the SEBI Adani-Hindenburg case?

Petitioners claimed that SEBI, investigating allegations against the Adani Group, provided a shield for the Adani Group’s regulator involved in insider trading and market manipulation. The Supreme Court then instructed SEBI to independently investigate the case and formed a committee of experts led by former SC judge Justice A.M. Sapre. For the hearing of the case, Solicitor General Tushar Mehta, present for SEBI, told the bench, “There was a growing trend of importing stories from outside India to influence things and policies inside India.”

Hindenburg Research leveled a series of allegations against the Adani Group, including fraudulent transactions and manipulation of share prices. The Adani Group dismissed the allegations as baseless.

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