Hindenburg row: SC may give SEBI 3 months more for probe

New Delhi, May 12

Noting that there needed to be some “alacrity”, the Supreme Court on Friday said it could grant three additional months — and not six — to SEBI to probe into the allegations by Hindenburg Research of stock price manipulation by the Adani Group and any possible lapses in regulatory disclosures.

“We cannot grant six months now. There needs to be some alacrity in the work. Put together a team. We can list the case in mid-August and have the report then… Six months cannot be given as a minimum time. SEBI cannot take an indefinitely long period. We will give it three months,” a three-judge Bench led by CJI DY Chandrachud told Solicitor General Tushar Mehta, who represented SEBI.

Stating that it has received a report from the expert panel headed by Justice AM Sapre (retd), the Bench said it would pass orders on May 15 after perusing the report.

Mehta said at least six more months were required, considering the complexities of the matter. He said the SEBI has said in its application that at least 15 months were actually needed and that it would try to complete the probe in six months.

On behalf of petitioners, advocate Prashant Bhushan opposed SEBI’s plea for extension of time.

During the hearing, the Bench — which also included Justice PS Narasimha and Justice JB Pardiwala — cautioned the lawyer representing one of the petitioners that it was not about any regulatory failure on the part of SEBI.“Be careful when you make allegations. This may affect the sentiments in the stock market. It’s all your allegations and the panel has been formed to look into it,” it noted.

More than two months after the top court directed SEBI to probe into the allegations of stock price manipulation by the Adani Group, the Indian market regulator had last month sought a six-month extension to complete the probe. In its March 2 order, the Bench had asked SEBI to expeditiously conclude the investigation within two months and file a status report.

However, in an application filed before the expiry of the two-month period, SEBI submitted that for ascertaining possible violations related to “misrepresentation of financials, circumvention of regulations and/or fraudulent nature of transactions”, it would take six more months to complete the exercise.

A six-member expert committee headed by former Supreme Court judge AM Sapre set up by the top court to investigate possible regulatory failures in dealing with alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies in the wake of the Hindenburg Research report is reported to have submitted its report in a sealed cover.