Adani-Hindenburg row: SC steps in to shield investors’ interest

The Bench has constituted an expert committee to review the regulatory mechanism in light of the fact that Adani stock crash was precipitated by a report published by Hindenburg Research exposing alleged murky affairs of Adani group of companies, reports Mudit Mathur In order to protect Indian investors against volatility of the kind which has been witnessed in the recent past after publication of Hindenburg Research report on 24 January exposing alleged murky affairs of Adani Group of companies, the Supreme Court of India appointed six-member expert committee headed by former judge of the apex court, Justice Abhay Manohar Sapre, and enlarged the ambit of ongoing investigations by directing SEBI (Securities and Exchange Board of India) to include other pointedly referred issues agitated in various petitions before it. While entertaining a batch of civil and criminal petitions concerning the loss of investors’ wealth in the securities market over the last few weeks because of a steep decline in the share prices of the Adani Group of companies, Chief Justice of India, Dr Dhananjaya Y Chandrachud,  pronounced the reportable order of the Bench comprising Justice Pamidighantam Sri Narasimha and Justice JB Pardiwala. The bench constituted an expert committee to review the regulatory mechanism in the light of the Adani-Hindenburg issue. The decline in the share price was precipitated by a report published by Hindenburg Research. Hindenburg Research inter alia alleged that the Adani Group of companies have manipulated its share prices; failed to disclose transactions with related parties and other relevant information concerning related parties in contravention of the regulations framed by SEBI; and violated other provisions of securities laws. The report also revealed that Hindenburg Research has taken a short position in the Adani Group companies through US traded bonds and non-Indian traded derivative instruments. It is against this background that a number of civil and criminal writ petitions came before the court for consideration. The civil writ petition filed Vishal Tiwari expressed concern that public money amounting to thousands of crores is at risk because public institutions like the State Bank of India and the Life Insurance Corporation of India are exposed to the Adani Group. It urged the issuance of directions to the Union of India and the Union Ministry of Home Affairs to constitute a committee headed by a retired judge of the Supreme Court to investigate the contents of the report published by Hindenburg Research.