Hindenburg row: Supreme Court verdict today on pleas seeking to probe Adani

Hearing the petitions, the SC had in March 2023 asked the Securities and Exchange Bureau (SEBI) to continue the probe initiated in the wake of the report published by Hindenburg research on Adani group of companies ans to examine “whether there was any manipulation of stock prices in contravention of existing laws”.

The SC also set up a committee under its former judge Justice Abhay Manohar Sapre “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 other members of the expert committee areude former SBI chairman O P Bhat, former Bombay High Court judge Justice J P Devadhar, former chairman of Infosys K V Kamath, former chairman of UIDAI and Infosys co-founder Nandan Nilakeni, and Advocate Somasekhar Sundaresan (subsequently elevated as HC judge).

The expert committee in its report said that “no coherent pattern of abusive trading” of stocks by the Adani group “has come to light”.

SEbI in its status report said it is still gathering details pertaining to “economic interest shareholders” of 12 Foreign Portfolio Investors (FPIs) which are public shareholders of the Adani Group companies. This investigation was to find if there has been a violation of Section 19A of the Securities Contract (Regulation) Act, which stipulates minimum 25% public shareholding in listed companies.

Reserving its order, the bench had disputed the petitioner’s contention that the Hindenburg report is “credible” and said it cannot make such an assumption.

“As a court, how do we treat it as credible? We will have to rely on our investigating agencies to investigate… Therefore, we have to ask our investigative agencies to probe those allegations. You called it a credible investigation. But honestly, we can’t make that assumption that it’s either credible or lacking in credibility”, the CJI had said.