The Supreme Court on Thursday directed SEBI to investigate Adani Group within 2 months and submit a status report while constituting a committee to look into extant regulatory framework to protect investors, strengthen investor awareness, contravention of law, if any, by the Adani Group.
The apex court ordered that the Securities and Exchange Board of India must probe if there are violations of the Securities act by the Adani Group, whether there has been a failure to disclose related party transactions.
A bench, headed by Chief Justice of India D.Y. Chandrachud and comprising Justices P.S. Narasimha and J.B. Pardiwala delivered the order on a batch of petitions filed by advocates Vishal Tiwari, M.L. Sharma, Congress leader Jaya Thakur, and Anamika Jaiswal.
However, the apex court allowed them to file their report in a sealed cover.
The Supreme Court also formed a committee headed by its retired judge A.M. Sapre to probe into the Adani-Hindenburg controversy. The top court said the committee will consist of O.P. Bhat, Justice J.P. Devadhar (retired), K.V. Kamat, Nandan Nilekani and Somasekhar Sundaresan.
The bench added that the expert committee will be headed by retired justice Abhay Manohar Sapre, former judge of the Supreme Court.
The committee will provide an overall assessment of the situation and the causal factors led to the volatility in the security markets. The committee will suggest measures to strengthen investors' awareness and also investigate whether there has been regulatory failure in the alleged contravention of laws pertaining to the securities markets in connection with Adani group or other companies, it added.
On February 17, the Supreme Court had said it would not accept sealed cover names of experts suggested by the Centre for inclusion on the committee to be set up to examine Hindenburg report, which resulted in crashing of Adani group company share prices and caused massive loss to investors.
The top court had said the court will select experts and maintain full transparency, and if the court were to take names suggested by the central government, then it would amount to a government constituted committee.
The bench added that the court wants full transparency for protection of interest of investors and it will form a committee so that there is a sense of confidence in the court.
On the aspect of the remit of the committee, Solicitor General Tushar Mehta, representing the Centre, submitted that there should be a holistic view and no unintended impact is caused in the security market. The bench orally observed that it cannot be denied that investors have lost a lot.
Mehta added that "so far as your lordship's suggestion that a former judge should sit on it, we don't mind".
In a written response, the central government had told the Supreme Court that the "truthfulness" of allegations made by a US short seller against the Adani Group should be examined and a fact-finding exercise required to be undertaken as a one-time measure and without making it a precedent.
In a written response, the Central government had told the Supreme Court that the "truthfulness" of allegations made by a US short seller against the Adani Group should be examined and a fact-finding exercise required to be undertaken as a one-time measure and without making it a precedent.
In a note submitted in the apex court, the Central government supported the formation of a committee to probe allegations made in the Hindenburg report.
(With inputs from IANS)
