Government accepts SC proposal, will set up regulatory body

New Delhi, February 13

The Centre on Monday agreed to the Supreme Court’s proposal to set up an expert committee to suggest measures to strengthen regulatory mechanisms for the stock market in the wake of the Adani Group share crash following the Hindenburg Research report even as it said SEBI and other agencies were well-equipped to handle it.

A Bench led by CJI DY Chandrachud asked Solicitor General Tushar Mehta to submit a note on the mandate of the expert committee by Wednesday and posted the matter for hearing on Friday.

Names in sealed cover

• The Centre said it be allowed to give names of experts, panel mandate in a ‘sealed cover’
• Maintains interests of Indian investors need to be protected against market volatility

Adani Enterprises’ shares decline 7%

Shares of Adani Group’s flagship company Adani Enterprises witnessed a 7% slump after rating firm Moody’s revised the outlook of conglomerate’s four firms to ‘negative’ from ‘stable’

During the hearing on two PILs alleging exploitation of innocent investors and “artificial crashing” of the Adani Group’s stock value, the Centre said it should be allowed to provide names of experts and the scope of the panel’s mandate in a “sealed cover”. “I have instructions that SEBI and other agencies are fully equipped, not only regime wise but otherwise also, to take care of the situation. However, responding to the suggestion which fell from the court, the government has no objection to constituting a committee,” he said.

SEBI, other agencies fully equipped

SEBI and other agencies are fully equipped to take care of the situation. However, responding to the suggestion from the court, the government has no objection to constituting a committee. —Tushar Mehta, Solicitor general

“But the remit of the committee would be very relevant because any unintentional message to international investors or domestic investors that the regulatory authorities need a monitoring by the committee may have some adverse impact on the flow of money,” Mehta said.

Maintaining that there should be a robust mechanism to protect Indian investors’ interests, the Supreme Court had on February 10 asked the Centre and market regulator SEBI to respond to two PILs alleging that innocent investors suffered huge losses following Hindenburg report, resulting in crash of Adani Group company share prices.

The Adani Group has dismissed the Hindenburg Research’s charges as lies.

There are two separate PILs filed by advocates Vishal Tiwari and ML Sharma, seeking a probe into the Hindenburg report-related issues. Besides a probe by a committee monitored by a retired judge of the top court, Tiwari’s PIL demanded the constitution of a special committee to oversee the sanction policy for loans of over Rs 500 crore given to big corporates.

Sharma has sought directions to the SEBI and the Ministry of Home Affairs to launch probes against Hindenburg Research founder Nathan Anderson and his associates in India for its report on the Adani Group. He alleged that Anderson and his associates in India hatched a criminal conspiracy by short-selling Adani stocks in hundreds of billion dollars before “concocting” a research report related to the Adani Group in order to crash the stock market and square up their short-sell position at the lowest rate.