Lagatar24 Desk
New Delhi, March 2: A committee led by retired Supreme Court Judge AM Sapre was established by the court on Thursday to look into the dispute surrounding the Hindenburg Research study on the Adani Group of Companies and the claims made against the Congolerate.
The committee will also include OP Bhat, Judge JP Devdatt, MV Kamath, Nandan Nilekani, and Somasekhar Sundaresan in addition to Justice Sapre.
The Committee will examine the following aspects:
– Suggest measures to strengthen frameworks;
– Investigate Adani row;
The committee shall submit its report in a sealed cover before this court within 2 months, the Court directed.
The Securities and Exchange Board of India (SEBI) is already looking into the case and will continue its investigation, a bench made up of the Chief Justice of India (CJI), DY Chandrachud, Justices SP Narasimha, and JB Pardiwala remarked.
However, the Court ordered that as part of the investigation, SEBI will also look into possible violations of Rule 19 of the Securities (Contract) Regulation Rules and potential stock price manipulation.
According to the Court, the SEBI is required to keep the court informed of its progress and to update the expert committee on the investigation.
Also, it was made clear that the committee’s formation won’t affect SEBI’s investigative procedures’ independence.
The decision was made in response to four petitions involving a recent study by short-seller Hindenburg Research that alleged stock price inflation fraud on the part of the group.
The Adani Group reportedly experienced losses totaling $100 billion as a result of the research, which caused the share values of several Adani companies to decline.
In his petition, attorney Manohar Lal Sharma urged the SEBI and the Union Home Ministry to launch an investigation and file a First Information Report (FIR) against Nathan Anderson, the founder of Hindenburg Research, and his colleagues in India.
Sharma also submitted a request for a gag order to prevent media coverage on listed firms, such as the Adani group of companies, until after they have been submitted to and reviewed by the SEBI.
In his second appeal, attorney Vishal Tiwari demanded that a commission led by a former justice of the supreme court conduct an investigation into the Hindenburg report. Tiwari has requested the formation of a special committee to monitor a procedure for approving loans greater than 500 crore. He also requested for a committee led by a retired Supreme Court justice to conduct an investigation into the Hindenburg Research report.
In addition to calling for the prosecution of the Adani group of firms, Congress leader Dr. Jaya Thakur questioned the State Bank of India (SBI) and the Life Insurance Corporation (LIC) for purchasing shares of the company at allegedly inflated rates.
The Central government’s proposal for the next steps in the case was rejected by the Supreme Court last month as it reserved judgement, saying it would instead create a committee on its own.
The Central Government was criticised by the Court for claiming that the report had no effect on the market and for making it obvious that it would not name a sitting judge to the committee to look into the matter.
Relevantly, the bench had previously stated that it would not impose any restrictions on the media’s ability to report on such financial changes.
