SEBI to Probe Adani Fallout After Supreme Court Direction

SEBI has been directed by the apex court for submitting a report by the end of April which will probe Adani fallout. Supreme Court has also appointed a committee for strengthening the existing regulatory mechanism to assure the investors’ protection from the volatility of the market.

Today on March 02, 2023 the top court directed the Securities Exchange Board of India (Sebi) to start the investigation to examine if the Adani group had failed to disclose related-party transactions and thus violated the Securities Act. SEBI has to submit its report within the next two months.

In its statement the SC said, “Apparently Sebi is seized of the allegations and has not expressly referred to the investigation in violation of the minimum public shareholding norms.”

Adani welcomes the order

Following the SC direction, Gautam Adani responded by tweeting, “The Adani Group welcomes the order of the Hon’ble Supreme Court. The group is going to bring finality within the given time-frames. Truth will prevail.”

For protecting investors from market volatility

Retired SC judge Abhay Manohar Sapre will lead the committee appointed by the apex court. The committee will make all possible attempts to protect investors from market volatility by strengthening the existing regulatory mechanism. OP Bhatt, KV Kamath, Nandan Nilekeni and Somasekar Sundaresan will also be present in the committee as its members.

The appointment of the committee as an offshoot of a batch of PILs (public interest litigations) that request info over the impact of the Hindenburg report on Adani Group. Supreme Court had reserved its order in the February 17 batch of PILs.

Government suggestion rejected by the SC

Following the crash of Adani company stocks in the wake of the Hindenburg Research report, the government offered to suggest in a sealed cover the names of members along with the scope of a proposed committee for examining stock market regulatory mechanisms. The Supreme Court rejected the government’s suggestion.

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SC to nominate the members of the committee

In response, the SC said that it is going to appoint the committee with the nomination of its members and will also draw up the scope of its functioning. The top court will also reserve its PIL orders related to the impact of the Hindenburg report on the Adani Group.