Review filed against SC’s judgment on Adani-Hindenburg issue

In January 2023, Hindenburg Research, an American short-seller, accused the power-to-port conglomerate of brazen stock manipulation and accounting fraud

Anamika Jaiswal, one of the petitioners in the Adani-Hindenburg case, has filed a review of the Supreme Court's January 3 judgment that declined to set up a Special Investigation Team (SIT) to probe the allegations against the Adani group.

The petition, a copy of which was reviewed by Moneycontrol, claims that there are errors in the judgment and states that Jaiswal's lawyer, Prashant Bhushan, has received new material that would satisfy the court to review its order.

Challenging the court's conclusion that the Securities and Exchange Board of India (SEBI) did not fail in its regulatory duties, the plea said, "There are many instances through which SEBI's regulatory failures are readily apparent. Such failures have eventually contributed to alleged regulatory contraventions and statutory violations."

According to the plea, the amendments made to the Foreign Portfolio Investor (FPI) Regulations by SEBI in 2018 and 2019 continuously and decisively diluted them in significant ways. The plea said: "SEBI, in its status report, has only updated the status of the 24 investigations as complete or incomplete and failed to disclose any findings or details on action taken. It cannot be concluded that there has been no regulatory failure unless the findings of the SEBI investigations are publicly reported."

The plea alleges that the Supreme Court failed to consider the letter by the Directorate of Revenue Intelligence (DRI) pointing out that siphoned-out money using over and under-invoicing from tax havens was being invested by Adani in group stocks in India.

According to the plea, "The Supreme Court failed to appreciate that while the issue of over-invoicing may not have been proved, the aspect of Adani promoters investing in Adani group stocks in Indian stock market, has never been investigated and calls for a thorough probe."

On January 3, the Supreme Court rejected the demand for transferring the probe into allegations of violations of securities laws by Adani group companies to a special investigation team, in a relief for the conglomerate almost a year after the Hindenburg Research came out with a report.

The Chief Justice of India (CJI) DY Chandrachud-led bench said it can't interfere in SEBI's domain. The court also dismissed allegations of conflict of interest against the panel it had set up in March 2023 to look into the claims made in the Hindenburg report. The court also asked the government and SEBI to check whether short selling of stocks following the Hindenburg report violated local laws.

In January 2023, Hindenburg Research, an American short-seller, accused the power-to-port conglomerate of "brazen stock manipulation and accounting fraud". The allegations were denied by the Adani group.
After receiving a string of public interest litigations (PILs) seeking a probe into the accusations, the top court set up an expert panel in March to look into the issue and suggest ways to enhance the regulatory framework.