Supreme Court appoints expert committee to investigate Adani Group following Hindenburg report
In a recent development, the Supreme Court of India has set up an expert committee to investigate the Adani Group following the Hindenburg Research report. The committee will consist of six members, led by former apex court judge Justice AM Sapre, and will investigate whether there has been a violation of Section 19 of SEBI rules, as well as whether there was any manipulation of stock prices.
The apex court was hearing petitions regarding the Hindenburg report, including the constitution of a committee relating to regulatory mechanisms to protect investors’ interests. On February 17, the court refused to accept the Centre’s sealed cover suggestion on the appointment of the committee related to regulatory mechanisms to protect investors in the Adani-Hindenburg case, stating that it wants to maintain full transparency.
During the hearing, CJI DY Chandrachud had indicated that the sealed cover suggestion by the Centre would not be accepted, as the court wants to maintain full transparency. Solicitor General Tushar Mehta had submitted a sealed cover note, stating that two intentions should be kept in mind, one is that truth comes out and a holistic view is presented, and the other is that there is an unintended impact on the markets.
Over the past month, share prices of companies in the Adani Group have dropped significantly following the Hindenburg report, which alleged stock manipulation and fraud by the conglomerate. The Adani Group has attacked Hindenburg as “an unethical short seller” and stated that the report by the New York-based entity was “nothing but a lie”.
The continued sell-offs in the group’s stocks led its flagship firm, Adani Enterprises Limited, to cancel a fully subscribed Rs 20,000 crore follow-on public offer. In response, the Adani Group released a long 413-page report on January 29, stating that the recent Hindenburg report was not an attack on any specific company but a “calculated attack” on India, its growth story, and ambitions.
The Supreme Court’s decision to appoint an expert committee is a significant development in the Adani-Hindenburg case and will shed light on the allegations made against the conglomerate.
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