Adani-Hindenburg row: Supreme Court refuses SIT probe, says no ground to transfer case from SEBI

The Supreme Court emphasized its limited authority to intervene in SEBI's regulatory framework.
Supreme Court. (File photo | PTI)
Supreme Court. (File photo | PTI)

The Supreme Court on Wednesday while pronouncing its verdict on a batch of petitions seeking a court-monitored probe into the allegations of stock price manipulation against the Adani Group said that the facts of the case did not warrant a transfer of probe to an SIT or another agency.

Chief Justice of India (CJI) D Y Chandrachud refused an SIT probe into the matter remarking that "there was no material to doubt the investigation carried out by the Securities and Exchange Board of India."

"There was no material to show SEBI was lackadaisical in taking steps or had a regulatory failure, warranting a probe by a SIT or CBI," he said.

The top court said no valid grounds have been raised for this court to direct SEBI to revoke its amendments to the Foreign Portfolio Investors (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations.

The government and SEBI have to consider whether to act on recommendations made by the court-appointed expert panel or not to strengthen the interests of Indian investors, the CJI added.

The apex court also emphasized that its power to enter the regulatory framework of SEBI is limited.

It noted that SEBI has completed 22 out of the 24 investigations into the allegations levelled against the Adani Group.

"Noting the assurance given by the Solicitor General on behalf of SEBI, we direct SEBI to complete the two pending investigations expeditiously, preferably within three months," the bench, also comprising Justices J B Pardiwala and Manoj Misra, said.

The top court also rejected the reliance placed by one of the petitioners on the Organised Crime and Corruption Reporting Project (OCCRP) report to suggest that SEBI was lackadaisical in conducting the investigation.

"A report by a third party organisation without any attempt to verify the authenticity of its allegations cannot be regarded as conclusive proof," the bench said.

It also said the allegation of "conflict of interest" against some members of the court-appointed expert committee is unsubstantiated and is rejected.


The judgement on the PILs, filed by lawyers Vishal Tiwari, M L Sharma, and Congress leaders Jaya Thakur, and Anamika Jaiswal, was reserved on November 24 last year.

Appearing for one of the petitioners in the case, advocate Prashant Bhushan had told the apex court that SEBI's conduct in the matter had not been credible and trustworthy.

However, while reserving the verdict, the bench had said it had no reason to "discredit" SEBI, which probed allegations against the Adani group, considered close to the Modi government, as there was no material before it to doubt what the market regulator had done.

Adani Group stocks got bludgeoned on the bourses after short-seller Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.

The pleas claimed that the allegations inflated Adani Group's share prices and that after Hindenburg Research's report was out, the share value of various group entities fell sharply, reportedly to the tune of 100 billion dollars. The Adani Group, however, dismissed the charges as lies, saying it complied with all laws and disclosure requirements.

One of the PILs had alleged that changes to the SEBI Act provided a 'shield and an excuse' for the Adani Group's regulatory contraventions and market manipulations to remain undetected.

The top court had then asked the SEBI to independently investigate the matter and constituted a committee of experts headed by former SC judge Justice AM Sapre.

The other members of the court-appointed panel are O P Bhat (former Chairman of SBI), Justice J P Devadhar (retired judge of the Bombay HC), Jio Financial Services chairman K V Kamath, Infosys co-founder Nandan Nilekani, and securities lawyer Somasekharan Sundaresan.

(With inputs from Suchitra Kalyan Mohanty, and PTI)

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