Adani-Hindenburg row: SC forms panel, tells SEBI to finish probe in two months

The Supreme Court on Thursday, March 2, formed a committee headed by its retired judge AM Sapre to probe into the Adani-Hindenburg controversy. A bench headed by Chief Justice of India DY Chandrachud and comprising Justices PS Narasimha and JB Pardiwala delivered the order on a batch of petitions filed by advocates Vishal Tiwari, ML Sharma, Congress leader Jaya Thakur, and one Anamika Jaiswal. The top court said the committee will consist of OP Bhat, Justice JP Devadhar (retired), KV Kamat, Nandan Nilekani and Somasekhar Sundaresan.

The bench added that the expert committee will be headed by retired Justice Abhay Manohar Sapre, a former judge of the Supreme Court. The committee will provide an overall assessment of the situation and the causal factors that led to the volatility in the security markets. The committee will suggest measures to strengthen investors' awareness and also investigate whether there has been a regulatory failure in the alleged contravention of laws pertaining to the securities markets in connection with Adani group or other companies, it added.

The court also ordered a probe by the Securities and Exchange Board of India (SEBI), LiveLaw reported. Chief Justice Chandrachud reportedly said that SEBI will also investigate whether there has been a violation of S 19 of SEBI rules and whether there was any manipulation of stock prices. He said that the investigation must be concluded in two months and a status report must be filed. 

On February 17, the Supreme Court had said it would not accept sealed cover names of experts suggested by the Union government for inclusion on the committee to be set up to examine the Hindenburg report, which resulted in the crashing of Adani group company share prices and caused massive loss to investors. The top court had said the court will select experts and maintain full transparency, and if the court were to take names suggested by the Union government, then it would amount to a government-constituted committee.

The bench added that the court wants full transparency for the protection of the interest of investors and it will form a committee so that there is a sense of confidence in the court. On the aspect of the remit of the committee, Solicitor General Tushar Mehta, representing the Union government, submitted that there should be a holistic view and no unintended impact is caused in the security market. The bench orally observed that it cannot be denied that investors have lost a lot.

Mehta added that "so far as your lordship's suggestion that a former judge should sit on it, we don't mind". In a written response, the Union government had told the Supreme Court that the "truthfulness" of allegations made by a US short seller against the Adani Group should be examined and a fact-finding exercise required to be undertaken as a one-time measure and without making it a precedent.