- February 10, 2023
SC seeks Sebi’s response on petitions related to Hindenburg report on Adani Group by February 13 – Times of India
It has fixed February 13 as the date for hearing Sebi’s response.
The apex court asked Sebi to apprise it on how to ensure investors protection in future, amid persistent rout in stocks of Adani Group companies after a report by US short seller Hindenburg Research alleged stock manipulation and fraud.
“What really bothers us is how do we protect the interest of the Indian investors?” a bench headed by Chief Justice D Y Chandrachud said.
The bench, also comprising justices P S Narasimha and J B Pardiwala, suggested forming a committee of domain experts and others, besides putting in place “robust practices to protect investors”.
The SC asked Sebi about the existing structure of regulatory framework and how to strengthen it.
SC asked solicitor general Tushar Mehta, who appeared for Sebi, to consult the ministry of finance and inform the court about what robust mechanism the Centre is contemplating to prevent such blood-bath in future stock that happened after Hindenburg report on Adani group company.
The Solicitor General then said the market regulator and other statutory bodies were doing the needful.
The court responded that it was “just thinking aloud” and not making any observation on the merits of the case as “the stock markets usually run on sentiments”.
One of the PILs, filed by lawyer Vishal Tiwari, has sought a direction to the Centre to constitute a committee monitored by a retired apex court judge to inquire and investigate into the Hindenburg Research report which has made a slew of allegations against the business conglomerate led by industrialist Gautam Adani.
Another PIL, filed by advocate M L Sharma, seeks prosecution of short-seller Nathan Anderson of the US-based Hindenburg Research and his associates in India and the US for allegedly exploiting innocent investors and the “artificial crashing” of the Adani Group’s stock value in the market.
Sharma has sought directions for declaring short selling an offence of fraud against the investors, to be prosecutable under section 420 (cheating) of the Indian Penal Code (IPC), read with provisions of the Sebi Act.
Meanwhile, in a latest blow, rating agency Moody’s downgraded the ratings outlook for some Adani Group entities, while MSCI said it would cut the weightings of some companies in its indexes.
The conglomerate, which has denied any wrongdoing, has since been pummelled by a stock rout that has wiped some $110 billion off the value of its main seven listed firms.
(With inputs from agencies)
