In the Adani-Hindenburg case, the Supreme Court has constituted a 6-member expert committee. Retired judge AM Sapre will be the head of this committee. Along with him, Justices JP Deodhar, OP Bhat, MV Kamath, Nandan Nilekani, and Somasekhar Sundaresan will be included in this committee. A bench of Chief Justice DY Chandrachud, Justice PS Narasimha and JB Pardiwala gave this order on Thursday.
Along with handing over the investigation of the matter to this committee, the Supreme Court has also summoned the investigation report of manipulation of prices of stocks from the Security Exchange Board of India, ie SEBI. SEBI has to give a status report within 2 months. The court also made it clear that the formation of the committee will not hamper the independence of market regulator SEBI and its investigation process.
Adani Group Chairman Gautam Adani has welcomed the decision by tweeting. He said- 'Adani Group welcomes the order of the Supreme Court. The truth will prevail.
The Supreme Court committee will examine these 2 aspects:
Will suggest measures to strengthen the regulatory framework of the stock market. That is, the trading in the market will be monitored and confirmed.
Will investigate the controversies related to the sharp fall in Adani Group's shares. The group's shares fell after the Hindenburg report came out.
Apart from the committee, SEBI will also examine 2 aspects:
Whether Rule 19(A) of the Securities Contract Regulation Rules was violated?
Was there any manipulation of stock prices in violation of existing laws?
Rule 19 (A) is related to minimum public shareholding
Rule 19 (A) of the Contract Regulation Rules deals with the minimum public shareholding of companies listed in the stock market. According to Indian law, at least 25% of the shareholding in any listed company should be held by the public ie non-insiders.
It was said in the Hindenburg report that Gautam Adani's brother Vinod Adani manages shell companies abroad. Through them, billions of dollars were transferred to Adani Group's listed and private companies in India. This helped Adani Group to evade the laws.
The Supreme Court has also given these directions:
1. The Chairperson of SEBI will have to give all necessary information to the Expert Committee
2. Agencies associated with the Central Government will have to cooperate with the committee
3. The committee may consult outside experts for its work
4. The chairperson will decide the payment of committee members and the central government will bear
5. Union Finance Minister Nirmala Sitharaman will nominate a senior officer
6. He will act as the nodal officer for providing logistic assistance to the committee
7. The central government will bear all the expenses of the committee.
All 10 stocks of Adani Group rose on Thursday
Adani Enterprises, the flagship company of Adani Group, has climbed more than 4%. Adani Port is also up by more than 2%. On the other hand, Adani Power, Transmission, Green, and Wilmar are trading up by 5-5%. Adani Total Gas and NDTV also gained more than 4%. On the other hand, the group's cement company ACC has gained half a percent and Ambuja has gained more than 4%.
4 petitions reached SC in the Adani-Hindenburg case
So far 4 PILs have been filed in this matter. Advocates ML Sharma, Vishal Tiwari, Congress leader Jaya Thakur, and social worker Mukesh Kumar have filed these petitions. The first hearing in the case was conducted by Chief Justice DY Chandrachud and Justices PS Narasimha and JB Pardiwala on February 10.
Demand for registration of FIR and investigation in petitions
In the petition, Manohar Lal Sharma demanded an investigation and FIR against Hindenburg Research founder Nathan Anderson and his associates in India. Along with this, a ban on media coverage was also demanded on this matter.
Vishal Tiwari demanded an inquiry into the Hindenburg report by forming a committee headed by a retired SC judge. In his petition, Tiwari explained the condition of people when share prices fall.
Jaya Thakur has raised doubts over the role of the Life Insurance Corporation of India (LIC) and State Bank of India (SBI) in this matter. He has demanded an inquiry into the role of LIC and SBI in investing huge amounts of public money in Adani Enterprises.
Mukesh Kumar in his petition has sought directions from SEBI, ED, Income Tax Department, and Directorate of Revenue Intelligence to investigate. Mukesh Kumar has filed this petition through his lawyers Rupesh Singh Bhadauria and Mahesh Praveer Sahay.
SC refuses to ban media coverage of the case
Earlier on Friday, the Supreme Court had dismissed a petition seeking a ban on media coverage on the matter. The court had said that it cannot stop the media from reporting. At the same time, the court had said that it has reserved its decision regarding the constitution of the committee to investigate the matter and it will be heard soon.
Hindenburg report harmed investors
The petitions claim that Hindenburg short-sold the shares, causing "huge losses to investors". It has also been said that the report has tarnished the image of the country. It is affecting the economy. Simultaneously, the media hype over the report affected the markets and Hindenburg founder Nathan Anderson also failed to provide proof of his claims to the Indian regulator SEBI.
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