Holding that the power to transfer investigation must be exercised in exceptional circumstances and not in the absence of cogent justifications, the Supreme Court on Wednesday ruled that it found no ground to transfer the investigation from SEBI to an SIT in the Adani-Hindenburg case.
The court said that it is limited in its powers to enter the regulatory framework of SEBI. It also said that there were no valid grounds raised to direct SEBI to revoke its amendments on FPI and LODR regulations. The regulations do not suffer from any infirmities, the court ruled. “SEBI has completed investigation in 20 out of 22 matters. Taking into account the assurance of Solicitor General, we direct the SEBI to complete the investigation in the other two cases within 3 months,” the court said in its verdict, adding that the report of OCCPR cannot be taken into account to doubt the SEBI investigation.
The verdict was delivered by a bench comprising Chief Justice of India DY Chandrachud, Justices JB Pardiwala and Manoj Misra. On November 24, the bench had reserved its verdict on a batch of pleas seeking an independent probe into the allegations levelled by US-based investment research firm Hindenburg Research early last year.
In its report, Hindenburg accused the Adani Group of companies of stock price manipulations and said the conglomerate indulged in widespread manipulations and malpractices aimed at inflating its stock prices. Adani Group denied these claims in a 413-page reply.
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A bunch of PILs was subsequently filed in the Supreme Court by Advocates Vishal Tiwari, ML Sharma, Congress leader Dr. Jaya Thakur, and activist Anamika Jaiswal, seeking a court-monitored probe into the matter.
On March 2, the Supreme Court constituted a six-member committee to investigate if there is any regulatory lapses in the matter. The expert committee was composed of OP Bhat (former Chairman of SBI), retired Justice JP Devadhar, KV Kamath, Nandan Nilekani and Somasekharan Sundaresan, with former Supreme Court judge Justice AM Sapre heading the committee.
The SEBI was simultaneously directed to continue its probe initiated into the allegations against the Adani group. During the hearing, the bench had orally remarked that there was no material to doubt the investigation carried out by the Securities and Exchange Board of India.
The bench had also observed that there was no reason to doubt the impartiality of the members of the expert panel it had constituted to look at regulatory lapses, if any. The panel had said that it found no material evidence to suggest any lapses on part of the SEBI.