The Supreme Court on Wednesday issued a directive, urging the Securities and Exchange Board of India (SEBI) to conclude its investigation into the allegations made by US-based short-seller Hindenburg Research against the Adani Group within the next three months. The court emphasized that, at present, there is no basis to transfer the case to the Central Bureau of Investigation (CBI).
In its verdict, the court specified that both the government and SEBI will scrutinize any potential violations of the law by Hindenburg related to short-selling, and appropriate actions will be taken in accordance with legal provisions.
The bench, led by Chief Justice of India DY Chandrachud along with Justices JB Pardiwala and Manoj Misra, highlighted that SEBI has completed investigations in 20 out of 22 matters. With the assurance of the Solicitor General, the court directed SEBI to finalize the investigation in the remaining two cases within the stipulated three-month period.
Addressing concerns about SEBI's amendments on Foreign Portfolio Investment (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations, the CJI clarified that no valid grounds were raised to compel SEBI to revoke these amendments.
The court also dismissed reliance on a report by the Organised Crime and Corruption Reporting Project (OCCRP) from August, which alleged that Adani family business partners invested significantly in shares through 'opaque' Mauritius funds, resulting in a substantial loss of market capitalization for the Adani Group.
Referring to the OCCRP report, the CJI asserted that it cannot be considered as conclusive evidence to doubt SEBI's investigation. The court emphasized that third-party organization reports and newspaper articles can be treated as inputs but should not be regarded as proof to question the statutory regulator.
Earlier, on November 24, the Supreme Court had reserved its verdict, stating that it would not treat media reports on the conglomerate as the "gospel truth." The court expressed confidence in SEBI's actions, emphasizing that there was no material before it to doubt the regulator's investigation.
Furthermore, a Bloomberg News report revealed that the US government reviewed Hindenburg's accusations against the Adani Group and deemed them insignificant. Consequently, the government approved a $553 million loan for the conglomerate's Sri Lanka port terminal project. In response, Adani entities listed on the stock market experienced a significant rally, contributing over $23 billion to Adani's market value, with three companies hitting the upper circuit.
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