Adani-Hindenburg case: SC reserves judgment, CJI indicates at passing directions to SEBI

On November 19, an application was filed in the Supreme Court, requesting contempt proceedings against the SEBI, according to reports.

The Supreme Court on November 24 reserved the pleas pertaining to the Adani-Hindenburg issue for orders, and during the course of the hearing the Chief Justice of India (CJI) DY Chandrachud indicated that they will pass some directions to markets regulator SEBI.

Through the hearing, the CJI maintained that they decided to interfere in the issue only to ensure that the existing regulatory framework is strengthened to protect loss of investor wealth under these circumstances.

At the start of the hearing, Solicitor General (SG) Tushar Mehta, who appeared for Securities and Exchange Board of India (SEBI), told the Supreme Court on November 24 that it would not seek an extension to complete a probe into billionaire Gautam Adani’s group.

The market regulator further said that it has identified 24 ‘cases’ pertaining to conglomerate and have finished investigation on 22 such cases. For the remaining two cases, they are awaiting a response from foreign regulators and they cannot give a timeline per say.

Addressing the court on the suggestions of the SC-appointed expert panel on strengthening the existing regulatory framework, Tushar Mehta, said, “Spirit of this report is accepted and respected. However there maybe some constraints here or there, we will mould accordingly. These are broad suggestions. There are some functional constraints, we may require some elbow room for them.”

CJI asked the SG as to when these changes could be implemented and who is the authority to implement them. The SG noted that SEBI has a limited role under these circumstances as the rule making power is with the Central government and as such they will have to work together to implement these suggestions.

The CJI also heard objections from the petitioners on the SC panel report and announced to the court that he will consider all the submissions and pass directions accordingly.

Case file:

Hindenburg in January accused the Ahmedabad-based ports-to-power conglomerate of “brazen stock manipulation and accounting fraud”, allegations that the Adani group has vehemently denied, calling the report “a calculated attack on India”.

After receiving a flurry of PILs on the issue, SC in March 2023, formulated an expert panel to look into the issue and also come up with suggestions to enhance the existing regulatory framework. SC gave SEBI time till May to complete the investigation into the allegations.

In May, the apex court had granted Sebi an extension until August 14 to conclude its investigation. The extension was, however, shorter than the six months time sought by the markets regulator to complete the investigation.

Stocks surge

Earlier in the day, Adani Group stocks saw buying. Adani Enterprises was the biggest gainer among Nifty stocks rising 3.44 percent. Adani Ports added 1 percent.

Adani Power added 4 percent, Adani Energy Solutions 0.82 percent, Adani Green Energy 0.74 percent, Adani Total Gas 1.14 percent, NDTV 7.09 percent, Adani Wilmar 0.52 percent, ACC 0.09 percent while Ambuja Cements fell 0.42 percent.