Indian conglomerate Adani Group Chairman Gautam Adani has welcomed a ruling of the Supreme Court of the country declining to transfer the probe into the Adani-Hindenburg matter from market regulator SEBI to a Special Investigation Team or the Central Bureau of Investigation (CBI).
In a relief to the Adani group of companies, a bench of Chief Justice of India D.Y. Chandrachud, P.S. Pardiwala and Manoj Misra said the scope of power of the apex court to enter into the regulatory domain of SEBI is limited. It said the scope of judicial review is only to see whether any fundamental right has been violated.
The verdict of the top court came on a batch of petitions seeking a court-monitored investigation or CBI probe into the allegations made by US-based firm Hindenburg Research against the Adani group of companies regarding violations of the stock market. The bench said there has been no regulatory failure by SEBI and the market regulator cannot be expected to carry on its functions based on press reports though such reports can act as inputs for SEBI.
The top court also asked SEBI to complete within three months its probe into two cases pending out of 24 cases. The case is related to the allegations (part of a report by short-seller Hindenberg Research) that Adani had inflated its share prices. After the publication of these allegations a sharp fall in the share value of various Adani companies, reportedly to the tune of $100 billion was seen.
The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements. Various petitions were filed alleging that changes to the Securities and Exchange Board of India Act (SEBI Act) had provided a shield and an excuse for the Adani Group's regulatory contraventions and market manipulations to remain undetected.
The apex court then asked SEBI to independently probe the matter and also constituted an expert committee headed by retired Supreme Court judge Justice A.M. Sapre to look into the matter. In May last year, the expert committee, in its report, found no prima facie lapse on the part of the SEBI in the matter.