No ground to order investigation by SIT into allegations against Adani group, says Supreme Court

Tribune News Service

Satya Prakash

New Delhi, January 3

The Supreme Court on Wednesday rejected petitions seeking to transfer the probe into allegations of stock price manipulation levelled by Hindenburg Report against Adani Group from SEBI to an SIT.

A three-judge Bench led by CJI DY Chandrachud -- which had reserved its verdict in the case on November 24 last year -- said there was no ground here to transfer the probe in this case and it could only be raised if there was wilful or deliberate violation of rules.

Noting that SEBI had already completed probes into 22 of the 24 matters, the Bench directed SEBI to complete the investigation in the other two cases in three months.

The Bench, however, said, "This court has the power under Articles 32 and 142 to transfer the probe to CBI, etc, but such powers can only be used sparingly and this court will not ordinarily supplant this role, and the petitioners must put forth strong evidence to show that the investigative agency acted in a biased manner."

It also rejected allegations of conflict of interest against the Expert Committee appointed by it to look into the matter.

"The Govt of India and the SEBI to look into if there is any infraction of law by Hindenburg Report on short selling, and if so, take action in accordance with law," the CJI said, pronouncing the verdict.

It directed the Centre and SEBI to take into consideration the recommendations of the Expert Committee to protect interests of the Indian investors.

The report of OCCRP cannot be taken into account to doubt the SEBI investigation, it said.

"The reliance on OCCRP report is rejected and reliance on a third party organisation report without any verification cannot be relied upon as a proof," the top court said.

While reserving the verdict, the top court had on November 24 said that 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”.

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.

SEBI told the Supreme Court on August 22 last year that 22 of the 24 investigations into allegations of market manipulation against the Adani Group levelled in the Hindenburg report had 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”.

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#Gautam Adani #Hindenburg Report #Justice DY Chandrachud #Supreme Court