A petition filed in the Supreme Court has challenged the Registry’s refusal to list an application, which sought a status report from the Securities and Exchange Board of India (SEBI) on the action taken to address allegations of fraud by US short-seller Hindenburg Research against the Adani Group of companies.
Filed by Advocate Vishal Tiwari, the petition contended that in its January 3 order, the Supreme Court had given SEBI three months to complete its probe.
The Court had further declined to interfere or order further action on allegations of stock manipulation levelled by Hindenburg against the Adani group.
The top court of the country held that it could not go by newspaper reports on the controversy or supplant its views for that of experts, while leaving it to the SEBI to decide whether any further action was required in the matter.
The plea moved by Tiwari stated that the Court’s decision to say that this probe should preferably be completed within this timeline did not mean that the Apex Court did not fix a deadline.
After the deadline elapsed, Tiwari, who was one of the petitioners in the earlier case in which the January 3 order was passed, filed a fresh application before the Supreme Court, seeking the submission of SEBI’s investigation report in the Adani-Hindenburg matter, as directed by the Supreme Court on June 3.
It further sought the submission of a status report by the Central government as well as SEBI on whether they have considered the suggestions of the Court-constituted Expert Committee to improve the strength of the Indian securities market.
It also sought a detailed report from the Union of India and the SEBI on the share market crash and loss of investors after the result of Lok Sabha elections 2024.
On August 5, the Registrar declined to register the application on the ground that it was thoroughly ‘misconceived’ and did not disclose any reasonable cause. He reasoned that the Court has not laid down any deadline for SEBI’s investigation, contrary to Tiwari’s stance.
The Registrar noted that the Apex Court did not give any directions either to the Union Government or the SEBI to submit a status report or conclusive report to this Court. In the absence of any such categorical direction to submit the report(s), this application for direction for compliance was wholly misconceived, he noted.
Tiwari challenged this decision of the Registrar in the Apex Court.
The petition contended that the grounds of no reasonable cause for registration has suspended the Fundamental Right of the petitioner and has closed the door of the Court for the petitioner forever.
It was important for the public and the investors who experienced losses after the publication of the 2023 Hindenburg report against the Adani group to know the conclusions of SEBI’s probe, it added.
The matter took centrestage on August 10, when US-based shortseller Hindenburg Research released a new report, alleging that SEBI chairperson Madhabi Puri Buch may have conflicts of interest in the matter related to its earlier allegations of stock manipulation against the Adani Group.
The report said that a possible reason for the apparent lack of interest shown by the SEBI in investigating allegations of fraud against Adani may be because Buch and her husband Dhaval Buch had stakes in offshore companies with links to Adani companies.
The petition filed by Tiwari also mentioned the allegations.
It said the August 10 report came a year-and-a-half after Hindenburg’s earlier report on the Adani Group, which had far-reaching consequences, including the cancellation of the company’s flagship Rs 20,000 crore follow-on public offer.
All this created an atmosphere of doubt in the minds of the public and the investors. In such circumstances, it became incumbent for the SEBI to conclude the pending investigations and declare the conclusion of its probe.
SEBI responded to the allegations by requesting the investors to remain calm before reacting to such reports, assuring that the allegations against Adani have been duly investigated and stating that it remained committed to ensuring the integrity of the Indian capital market.
The response by SEBI further said that the chairperson has also recused herself in matters involving potential conflicts of interest.
A statement was also issued by Madhabi Puri Buch and her husband, refuting the allegations of conflict of interest.
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