SC verdict on Adani-Hindenburg issue is disappointing: CPI (M)

CPI-M politburo said in a statement that the SEBI had changed its own rules, making them more opaque and the court had not questioned it on "not acting" on complaints it received.

"The Supreme Court judgement in the Adani case rejecting petitions for an impartial probe is disappointing and unfortunate on several grounds. A statutory body like the SEBI has not been fulfilling its mandate for expeditiously probing allegations against the Adani group," it said.

"In 2014, the DRI had made a reference to SEBI on a direct charge against Adani. In 2021,Parliament had been informed that the SEBI had been probing allegations against Adani but in its affidavit to the Court, the SEBI denied such a probe. It is surprising that the Court took such a denial at its face value without questioning why the SEBI has not acted on the complaints," it added.

The statement said SEBI had "changed its own rules, making them more opaque, and toconceal who the ultimate beneficiary is."

"The Expert Committee set up by the Supreme Court had itself stated that 'SEBI's pursuit of investigations is based on the premise that it is pursuing the 'spirit of the law', whichflies in the face of the prospective amendments with deferred effect that SEBI has made on the legislative side'. However the Supreme Court has given approval to these amendments, which admittedly act as a wall to conceal identities of the links of foreign investors with the 'ultimatebeneficiary'," CPI(M) said.

"It is most unfortunate that the judgement has given an open licence to the government to probe whether Hindenburg Research's allegations 'ignored rules' and to take action accordingly, in other words to shoot the messenger, which would jeopardise all those media outlets which had published the Hindenburg report. The Supreme Court has not enhanced its credibility with this judgement," it added.

In a relief to the Adani group of companies, the Supreme Court on Wednesday declined to transfer the probe from the Securities and Exchange Board of India (SEBI) to a Special Investigation Team (SIT) or CBI into the Adani-Hindenburg issue over allegations of stock price manipulation by the Indian corporate giant.

A bench of Chief Justice of India DY Chandrachud, PS Pardiwala and Manoj Misra said the scope of power of the apex court to enter into the regulatory domain of SEBI is limited. It said the scope of judicial review is only to see whether any fundamental right has been violated. The SC said the facts of the case do not warrant the transfer of the probe to the SIT or other agency.

The SC also said there was no material to doubt the investigation carried out by the SEBI. The verdict of the top court came on a batch of petitions seeking a court-monitored investigation or CBI probe into the allegations made by US-based firm Hindenburg Research against the Adani group of companies regarding violations of the stock market.

The bench said there has been no regulatory failure by SEBI and the market regulator cannot be expected to carry on its functions based on press reports though such reports can act as inputs for SEBI. The top court asked SEBI to complete within three months its probe into two cases pending out of 24 cases. The case is related to the allegations (part of a report by short-seller Hindenberg Research) that Adani had inflated its share prices.

After these allegations were published, it led to a sharp fall in the share value of various Adani companies, reportedly to the tune of USD 100 billion. The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

Various petitions were filed alleging that changes to the Securities and Exchange Board of India Act (SEBI) had provided a shield and an excuse for the Adani Group's regulatory contraventions and market manipulations to remain undetected.

The apex court then asked SEBI to independently probe the matter and also constituted an expert committee headed by retired Supreme Court judge Justice AM Sapre to look into the matter. (ANI)