The Supreme Court on Friday said it had no reason to “discredit” SEBI, which probed allegations against the Adani group, as there was no material before it to doubt what the market regulator had done and the court did not have to treat what was set out in the Hindenburg report as a “true state of affairs”.
/ PTI
New Delhi, November 24
The Supreme Court on Friday said it had no reason to “discredit” SEBI, which probed allegations against the Adani group, as there was no material before it to doubt what the market regulator had done and the court did not have to treat what was set out in the Hindenburg report as a “true state of affairs”.
How do we believe report was credible
As a court, how do we treat it (Hindenburg report) as credible? We will have to rely on our investigating agencies to investigate. SC Bench
While asking the Securities and Exchange Board of India (SEBI) what it intended to do in future to ensure investors didn’t lose wealth due to volatility in the stock market or short-selling, the apex court observed it would not be proper for it to set up a special investigation team (SIT) on its own without any material before it.
A Bench headed by Chief Justice DY Chandrachud, which reserved its order on a batch of pleas concerning the Adani-Hindenburg row on allegations of stock price manipulation, said it could not ask a statutory regulator to take as the “gospel truth” something which was published in the media.
“We don’t have to treat what is set out in the Hindenburg report as ipso facto (automatically) a true state of affairs. That is why we directed the SEBI to investigate.
Because for us to accept something which is in the report of an entity, which in not before us and whose veracity we have no means of testing, would really be unfair,” the Bench, also comprising justices JB Pardiwala and Manoj Misra, told advocate Prashant Bhushan, who was appearing for one of the petitioners.
Bhushan argued that SEBI’s role in the matter was “suspect” for several reasons because a lot of information was available to the regulator way back in 2014. Bhushan said it was for the apex court to see whether the probe done by the SEBI was credible or not and whether some other independent organisation or an SIT was needed to be formed to investigate it.
The top court also took strong exception to Bhushan objecting to elevation of advocate Somasekhar Sundaresan – a member of expert panel appointed by it to investigate the alleged regulatory failure in the wake of Hindenburg report — as an additional judge of the Bombay High Court, terming it “unfair”.
“Why should we take these unsubstantiated allegations? By that logic, no lawyer who has appeared for an accused should become a High Court judge... It’s a 2006 appearance (for Adani) and you say something in 2023,” the Bench said.
Solicitor General Tushar Mehta, appearing for the SEBI, told the Bench that there was “a growing tendency of planting stories outside India to influence things and policies inside India”.
Mehta apprised the Bench that the investigations in 22 out of the 24 cases relating to allegations against the Adani group were over.
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