Adani-Hindenburg case: Supreme Court of India refuses to transfer probe from SEBI to SIT

Supreme Court of India on Wednesday (Jan 3) refused to hand over the investigation into Adani-Hindenburg case from the Securities and Exchanges Board of India (SEBI) to a Special Investigation Team (SIT). India’s apex court said that there was ‘no ground to transfer the investigation from SEBI to SIT (Special Investigation Team)’. It added that George Soros-led Organised Crime and Corruption Reporting Project (OCCRP)’s report cannot be used as a basis for a report by a statutory body like SEBI.

“The power of this court to enter the regulatory framework of Sebi is limited. There are no valid grounds raised to direct Sebi to revoke its amendments on Foreign Portfolio Investors (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations. The regulations do not suffer from any infirmities,” said the Supreme Court bench comprising Chief Justice of India (CJI) DY Chandrachud along with justices Manoj Misra and JB Pardiwala.

The bench was hearing a batch of petitions over the Adani-Hindenburg row involving allegations of stock price manipulation.

Watch | Impasse over choice of Ram Lalla idol: Temple trust may decide on black or white idol by January 14

However, even when the top court refused to hand the investigation over to an SIT, it directed SEBI to complete its investigation in three months.

“Sebi has completed investigation in 20 out of 22 matters. Taking into account the assurance of the Solicitor General, we direct the SEBI to complete the investigation in the other two cases within three months,” said the Supreme Court.

“The reliance on unsubstantiated news reports and third-party organisations cannot be accepted to doubt the probe by a statutory regulator,”

The Supreme Court rejected contention of the petitioners that said there was a conflict of interest when it came to some members of the Expert Committee.

The court has asked SEBI to take into account the recommendations of the expert committee in order to strengthen interest of the Indian investors.

“The government of India and the Sebi should look into whether there is any infraction of law in the Hindenburg report on short selling and if so, take action in accordance with law,” said the Supreme Court.

In the wake of the report by short-seller Hindenburg Research, the petitions had accused Adani Group of inflating its share prices. Publishing of the Hindenburg report was a blow to Adani conglomerate as shares of various of its companies sharply fell after the Hindenburg report.

(With inputs from agencies)