Adani-Hindenburg Case: Supreme Court Reserves Verdict

The Supreme Court reserved on Friday its judgment on the matter related to the market regulator's probe into the Adani-Hindenburg case.

The case involved petitions that sought contempt of court proceedings against the Securities and Exchange Board of India. The petitioner alleged that the SEBI has not completed its investigation in a timely manner concerning stock-manipulation allegations.

During the arguments, the Supreme Court questioned the “wisdom” of allegations of conflict of interest could be levelled against members of the committee appointed by the top court to look into the fallout of the Hindenburg Research allegations against the Adani Group.

Chief Justice of India DY Chandrachud said SEBI cannot be expected to rely on publication of articles by the Financial Times, Guardian.

The CJI also questioned where's the material "before us to doubt SEBI". “Is proper for the court to say that it will constitute its own special investigation team?”

The chief justice also said "you cannot rely" on the communication from the Directorate of Revenue Intelligence to SEBI regarding the allegations of overvaluation of coal by the Adani Group.

"DRI closed the investigation," the CJI said. "Tell us how the overvaluation of coal imports is relevant to the case."

After Hindenburg Research's report and Adani Group's counter in January, four public interest petitions were filed before the apex court. The PILs had broadly asked for directions regarding allegations against the Adani Group.

On March 2, the Supreme Court directed SEBI to look into any disclosure breaches and possible price manipulation of Adani stock in violation of existing laws.

The regulator was directed to submit its report within two months, but in April, SEBI made submissions before the apex court asking for six months to conclude its investigation.

The court, however, had granted time only till Aug. 14.

Since the markets regulator required more time to complete the investigation, it filed an application before the court on Aug. 14 asking for 15 additional days.

As per SEBI's last status report which was submitted to the court on Aug 25, the regulator had wrapped up its investigation in 22 of the 24 matters.

The Supreme Court had also set up an independent committee headed by Justice (retired) Abhay Manohar Sapre. Other members of the committee included OP Bhat, KV Kamath, Nandan Nilekani, Somashekhar Sundaresan, and retired Justice JP Devadhar.

The committee had submitted its report before the top court in May, wherein it stated that a conclusion with regards to a regulatory failure by SEBI could not be ascertained at the time.