Hindenburg report: SC verdict on PILs seeking probe into allegations against Adani Group on Wednesday

New Delhi, January 2

The Supreme Court will on Wednesday pronounce its verdict on petitions seeking probe into allegations of stock price manipulation by the Adani Group and any possible lapses in regulatory disclosures in the wake of the January 24, 2023 Hindenburg Research report.

A three-judge Bench led by Chief Justice of India DY Chandrachud – which had reserved the verdict on November 24 last year – would pronounce the verdict at 10.30 am.

While reserving the verdict, the Bench had said market regulator SEBI cannot be asked to decide based on media reports. “I do not think you can ask a financial regulator to take something printed in the newspaper. This does not discredit SEBI. Should SEBI now follow journalists?” the CJI had wondered.

The top court had also cast doubts over the credibility of the Hindenburg report, saying, “We don’t have to accept the Hindenburg report as ipso facto factually correct. That is why we asked SEBI to investigate.”

“Because for us to then accept something which is in a report of an entity which is not before us and whose veracity, we have no means of testing, would really be unfair. Therefore, we asked SEBI — You go and exercise your powers and test what has not come to light, you treat these as revelations or disclosure of allegations and you now exercise your jurisdiction as an adjudicating body,” the Bench had said.

“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 Bench noted.

The top court’s comments had come following petitioners’ counsel Prashant Bhushan’s submission that there were many factual revelations in the Hindenburg report. It had also rubbished the demands for a probe against SBI and Life Insurance Corporation, asking, “Is it a college debate?”

Alleging conflict of interest against members of an Expert Committee set up by the Supreme Court to probe into allegations of accounting fraud and stock price manipulation against the Adani group in the Hindenburg report, a petitioner had in September urged it to constitute a new expert panel to look into the allegations afresh.

Acting on PILs, the Supreme Court had in its March 2, 2023 order also asked SEBI to investigate if there was any manipulation of stock prices in contravention of existing laws and if there was any failure to disclose transactions with related parties and other relevant information concerning related parties to the market regulator.

The SEBI has told the Supreme Court on August 22 last year that 22 of the 24 investigations into allegations of market manipulation against Adani Group levelled in the Hindenburg report have been finalised while the remaining two were of interim nature. The market regulator said it “shall take appropriate action based on the outcome of the investigations in accordance with law…”