Supreme Court refuses SIT investigation in Adani-Hindenburg case, Adani said - Satyamev Jayate

Adani Group: In the Adani-Hindenburg case, the Supreme Court today i.e. on January 3 has given SEBI 3 more months to investigate the remaining 2 cases. At the same time, they also refused to hand over the investigation of the case from SEBI to SIT. The bench of Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Mishra gave this decision. The court said that the power of this court to interfere in the regulatory framework of SEBI is limited. SEBI has completed investigation in 22 out of 24 cases. Keeping in view the assurances of the Solicitor General, we direct SEBI to complete the investigation in the other two cases within 3 months.

The Supreme Court said that the OCCPR report cannot be seen as a doubt on SEBI's investigation. The Supreme Court believes that there is no basis to transfer the investigation from SEBI to SIT. 'OCCRP' is an investigative organization formed in 2006, funded by investors and businessmen like George Soros and the Rockefeller Brothers.

Adani said- Truth has won

After this decision of the court, Adani Group Chairman Gautam Adani said - 'The court's decision shows that truth has won. Satyamev Jayate. I am grateful to those who stood with us. Our contribution to India's growth story will continue. Jai Hind.'

On November 24, the court had reserved the decision.

After hearing the case on November 24 last year, the court had reserved its decision. CJI had said- We do not need to accept the report of American company Hindenburg as factually correct. Hindenburg is not present here, we have asked SEBI to investigate.

On January 24, 2023, Hindenburg Research had leveled allegations against Adani Group ranging from money laundering to share manipulation. The Supreme Court had formed a 6-member committee to investigate the case. Apart from this, market regulator SEBI was also asked to investigate.

The court rejected the arguments of the petitioners

The court rejected the petitioners' arguments regarding conflict of interest on the part of the expert committee members. However, the court also said that the Government of India and SEBI will consider the recommendations of the committee to strengthen the interests of Indian investors.

There was a demand for reconstitution of the expert committee

A petition demanded reconstitution of the expert committee. On this, the Supreme Court bench had said that it would be very unfair to the committee and people would stop working in the committee appointed by the Supreme Court. Apart from this, the court had also said that market regulator SEBI will have to complete the investigation in all the cases.

Demand to take contempt action against SEBI

A petition was also filed by SEBI in the Supreme Court demanding contempt action against SEBI due to the delay in the report. PIL petitioner Vishal Tiwari had said that despite the deadline given to SEBI, it has failed to comply with the court's directions and has not submitted its final report.

SEBI was asked to investigate on 2 aspects

Was there a violation of Rule 19(A) of the Securities Contract Regulation Rules?

Was there any manipulation of stock prices in violation of existing laws?

Rule 19 (A) is related to minimum public share holding.

Rule 19 (A) of the Contract Regulation Rules is related to minimum public shareholding of companies listed in the stock market. According to Indian law, at least 25% shareholding in any listed company should be of public i.e. non-insiders.

It was alleged in the Hindenburg report that Gautam Adani's brother Vinod Adani manages shell companies abroad. Through these, billions of dollars were transferred to listed and private companies of Adani Group in India. This helped Adani Group to escape the law.

What has happened so far in the SEBI investigation?

On March 2, the Supreme Court had formed a committee in this matter and also gave SEBI two months time to investigate.

SEBI was to submit its report by May 2, but during the hearing, SEBI asked for 6 months' time for investigation.

The bench extended it till August. That means SEBI got a total of 5 months to conduct its investigation and submit the report.

On August 14, SEBI sought 15 more days from the Supreme Court to complete its investigation and submit the report.

On August 25, SEBI filed a status report in the Supreme Court. Told that 22 investigations have been finalized and 2 are incomplete.

On 24 November 2023, the Supreme Court had reserved the decision. It was said that there is no need to accept Hindenburg's report as correct.

The committee has made the report public on May 19

The Supreme Court committee has made the investigation report of the Adani-Hindenburg case public on May 19, 2023. The committee had said that SEBI's failure was behind the alleged manipulation in the price of Adani's shares, this conclusion cannot be reached yet. The committee had also said that SEBI's investigation on foreign funding in group companies has been inconclusive.

Points of the expert committee report...

The committee said in the report- SEBI suspects that 13 foreign funds investing in Adani Group may have links with the promoters.

No pattern of wash trade has been found in Adani Group shares. Wash trade means buying and selling shares yourself to increase volume.

Some institutions had taken short positions before the Hindenburg Report was published. When the share price fell, he bought it and made a profit.

Total 6 petitions filed so far

In the petition, Manohar Lal Sharma had demanded investigation and FIR against Hindenburg Research founder Nathan Anderson and his associates in India. Along with this, a demand was also made to ban media coverage in this case.

Vishal Tiwari had demanded an investigation into the Hindenburg Report by forming a committee headed by a retired SC judge. In his petition, Tiwari had talked about the situations people face when share prices fall.

Jaya Thakur had raised doubts on the role of Life Insurance Corporation of India (LIC) and State Bank of India (SBI) in this matter. He had demanded an investigation into the role of LIC and SBI in investing huge amounts of public money in Adani Enterprises.

In his petition, Mukesh Kumar had sought instructions from SEBI, ED, Income Tax Department, Directorate of Revenue Intelligence for investigation. Mukesh Kumar had filed this petition through his lawyers Rupesh Singh Bhadauria and Mahesh Praveer Sahay.

Another petition was filed in which petitioner Anamika Jaiswal had asked for forming a new committee. He had said that such persons should be included in the committee, whose image is spotless and who have nothing to do with this case.

Vishal Tiwari had filed another petition due to the delay in SEBI report. In this, contempt proceedings were demanded. It was said that despite the deadline given to SEBI, it has failed to comply with the court's instructions.