On Wednesday (3rd January), India’s business tycoon Gautam Adani expressed his contentment after the Supreme Court ruled that it could not interfere with the regulatory framework or use the Hindenburg report as a justification for launching an SIT investigation. SEBI will proceed with its investigation in accordance with the law, the court said.
Following this, Gautam Adani took to X, formerly known as Twitter, and said that his humble contribution to India’s growth story would now continue. “The Hon’ble Supreme Court’s judgment shows it. Truth has prevailed. Satyameva Jayate. I am grateful to those who stood by us. Our humble contribution to India’s growth story will continue. Jai Hind,” Adani was quoted as saying.
The Hon'ble Supreme Court's judgement shows that:
— Gautam Adani (@gautam_adani) January 3, 2024
Truth has prevailed.
Satyameva Jayate.
I am grateful to those who stood by us.
Our humble contribution to India's growth story will continue.
Jai Hind.
Earlier today, the Supreme Court stated that its jurisdiction to enter the regulatory framework of SEBI is restricted. There are no valid grounds for directing SEBI to withdraw its revisions to the FPI and LODR regulations. “SEBI has concluded investigations in 20 of 22 cases. The investigation into the remaining two cases will be completed within three months,” the order stated.
“Allegations of conflict of interest of expert committee members are unsubstantiated and rejected,” a bench led by Chief Justice of India DY Chandrachud said.
The order stated that the Organised Crime and Corruption Reporting Project (OCCRP) report could not be used to cast doubt on the SEBI probe. It stated that reliance on the OCCPR report is rejected and that reliance on a third-party organisation report without any verification cannot be relied on as proof.
In March of last year, the Supreme Court formed a six-member committee to “investigate if there was a regulatory failure in dealing with the alleged violation of securities market laws about the Adani Group or other companies.” It also requested the SEBI to investigate whether there was a violation of the minimum public shareholding standards in public limited companies, a failure to report transactions with linked parties, and stock price manipulation.
On November 24, 2023, a panel of three judges consisting of Chief Justice of India D Y Chandrachud, Justices J B Pardiwala, and Manoj Misra reserved its verdict on the petitions, objecting to claims of conflict of interest leveled against members of the committee it had constituted.
It is notable here that during the hearing, the SC bench had rejected advocate Prashant Bhushan’s attempts to take Hindenburg’s claims as truth on face value. “We don’t have to accept the Hindenburg report as ipso facto factually correct. That is why we asked SEBI to investigate…”, CJI had said.
In January last year, Hindenburg Research accused the Adani Group of fraud and stock price manipulation. The charges were denied by Gautam Adani who claimed that no regulatory failure was found by the expert committee which was constituted by the Supreme Court.
In May of last year, a 6-member expert panel had failed to find any wrongdoing on SEBI’s part regarding Adani Group. The committee concluded that the Adani Group has disclosed the information of all the beneficial owners of the business. The report also listed all the details of these beneficial owners as obtained from SEBI.
The Adani Group had trashed the Hindenburg Research report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations’. The court reportedly refused to order an SIT probe on the allegations made by short-seller Hindenburg. It added that there is no evidence that SEBI was negligent in taking action and no reason to suggest any conflict of interest on SEBI’s part.
