Ashish Ranjan
Adani Row: Friday, the Supreme Court refused to accept in “sealed cover” the Centre’s proposal regarding a proposed panel of experts recommending measures to plug loopholes in the regulatory regime to prevent any loss to Indian investors due to market volatility, as was witnessed during the Adani-Hindenburg episode.
In the interest of investors, a bench composed of Chief Justice D Y Chandrachud, Justices P S Narasimha and J B Pardiwala stated that it wishes to retain complete openness.
The Adani Row bench stated, “We will not accept your suggestion for a sealed envelope because we want to maintain complete transparency.”
SC says it will not take suggestions from government or petitioners on who should be members of the committee to examine various aspects of the Adani-Hindenberg issue but would select experts on its own. Reserves order on pleas seeking probe. @IndianExpress
— Ananthakrishnan G (@axidentaljourno) February 17, 2023
The court also deferred its decision on the formation of an investigative committee. The bench stated that it will not accept suggestions from the government or petitioners regarding the committee’s membership, but will instead choose the experts on its own.
In the wake of the share price crash in Adani Group stocks, which was precipitated by a report by Hindenburg Group over allegations of “stock manipulation,” the Centre agreed on Monday to the apex court’s proposal to establish a panel of experts to examine ways to strengthen the regulatory mechanisms for the stock market. However, the Adani group has denied any wrongdoing.
On the last date of hearing, after hearing two submitted petitions, the Supreme Court stated that it was “pondering aloud” whether a committee of experts may be established to offer possible enhancements to the regulatory apparatus.
Tushar Mehta, appearing on behalf of the Centre, said the court that his “instructions are that the present structure — SEBI and other agencies — are adequately competent, not only regulatory-wise but also otherwise, to handle the issue…
However, in response to the request made by Your Lordships, we have no objection…the government has no objection to the formation of a committee.”
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In a note submitted to the apex court, the Securities and Exchange Board of India (SEBI) stated that it “is already investigating both the allegations made in the Hindenburg report and the market activity immediately preceding and following the publication of the report to identify violations of SEBI Regulations,” including those pertaining to short selling.
