4 min readNew DelhiMar 3, 2023 01:10 AM IST
First published on: Mar 2, 2023 at 11:08 AM IST
THE SUPREME COURT Thursday set up a six-member expert committee “to investigate if there was a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies” and submit a report in a sealed cover in two months. It asked the Securities and Exchange Board of India (SEBI) Chairperson to ensure requisite information is provided to the committee.
Separately, the Supreme Court asked the capital market regulator SEBI – already probing allegations against Adani Group companies – to specifically investigate: i) if there has been a violation of the minimum public shareholding norms in public limited companies, ii) if there has been a failure to disclose transactions with related parties, and iii) if there was any manipulation of stock prices.
A three-judge bench presided by Chief Justice of India D Y Chandrachud asked SEBI to “expeditiously conclude the investigation within two months and file a status report”. The capital market regulator has also been asked to apprise the expert committee of the action taken in furtherance of the court’s directions and steps taken in furtherance of its ongoing investigation.
Reacting to the judgement, Gautam Adani, Chairman, Adani Group, said, “The Adani Group welcomes the order of the Hon’ble Supreme Court. It will bring finality in a time bound manner. Truth will prevail.”
Earlier, SEBI had told the court it was already enquiring into the allegations made in the Hindenburg Research report as well as the market activity immediately preceding and post its publication. The report had alleged Adani Group companies of “brazen stock market manipulation and accounting fraud”.
The expert committee set up by the top court will be headed by former Supreme Court judge AM Sapre, and the other members are: KV Kamath (former CEO of ICICI Bank), OP Bhat (former SBI Chairman), Nandan Nilekani (Infosys Chairman), justice (retired) JP Devadhar, and Somasekhar Sundaresan, a lawyer with expertise in securities laws.
The remit of the expert committee includes suggesting measures to strengthen the regulatory framework and investor awareness. The SEBI Chairperson has been asked to help the committee with all required information, and the committee can also seek the cooperation of all law enforcement and other financial sector regulation agencies.
The CJI-led bench, comprising Justices P S Narasimha and J B Pardiwala, said the expert committee was also set up “for the assessment of the extant regulatory framework and for making recommendations to strengthen it” so as “to protect Indian investors against volatility of the kind which has been witnessed in the recent past”.
The Supreme Court ruling came on a batch of petitions which sought a probe into various aspects of the controversy following the publication of the Hindenburg Research report on the Adani Group January 24.
The court said that “the constitution of the expert committee does not divest SEBI of its powers or responsibilities in continuing with its investigation into the recent volatility in the securities market”. The committee, it said, will “provide an overall assessment of the situation including the relevant causal factors which have led to the volatility in the securities market in the recent past”.
It will also investigate whether there has been a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies. (Reuters, file) 
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