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In a significant verdict, the Supreme Court has backed the Securities and Exchange Board of India (SEBI)’s clean chit to the Adani Group in the Hindenburg case, dismissing the request for a special investigation team (SIT) probe. The court emphasized that the report by George Soros-led OCCRP cannot serve as the basis for doubting SEBI’s investigation. The judgment, delivered by Chief Justice of India DY Chandrachud and justices JB Pardiwala and Manoj Misra, directed SEBI to complete the investigation in the remaining two cases within three months.
Key Points:
The Supreme Court rejected the reliance on the OCCRP report and emphasized that third-party reports without verification cannot be used as conclusive evidence.
SEBI has investigated 22 out of 24 cases linked to Hindenburg Research’s allegations, and the court granted three months for completing the investigation in the remaining two cases.
The court ordered the government and SEBI to assess whether Hindenburg followed market shorting rules and take appropriate action.
Petitions filed by lawyers and activists, alleging share price inflation by the Adani Group, were dismissed, with the court highlighting the lack of adequate research and reliance on unsubstantiated reports.
The judgment underscored that public interest jurisprudence aims to provide access to ordinary citizens, but petitions lacking sufficient evidence cannot be accepted.
The court clarified that exceptional circumstances are required to transfer an investigation to an SIT, and such power must have strong, logical justification.
The verdict highlighted the need to strengthen investor protection in light of the Hindenburg case and instructed the Centre and SEBI to implement committee suggestions.
Background:
The Adani Group faced allegations of inflating share prices and market manipulation following a report by short-seller Hindenburg Research. The Supreme Court dismissed petitions challenging SEBI’s clean chit filed by various individuals, including lawyers and a Congress leader. The court underscored the importance of robust research in public interest petitions and emphasized the need to strengthen regulatory mechanisms to benefit Indian investors. The Adani Group welcomed the judgment, calling the allegations a “malicious combination of selective misinformation.”
The Adani Group welcomed the judgment, labeling the OCCRP report as an “attack on India.” The conglomerate had consistently refuted the Hindenburg report, calling it a “selective and manipulative presentation” to create a false narrative. The Supreme Court’s decision reinforces SEBI’s role as the statutory regulator and emphasizes the importance of evidence-backed allegations in questioning regulatory actions.
