The Supreme Court on Friday asked Securities and Exchange Board of India (SEBI) to give its response to petitions filed related to the Hindenburg report by February 13. Expressing its concerns about protecting the interests of Indian investors, the apex court also sought the view of the central government on ways to improve the existing regulatory mechanism.
The Supreme Court bench, consisting of Chief Justice of India DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala, also proposed the formation of an expert committee that can suggest ways in which the existing regulatory framework can be improved. The bench was hearing petitions related to the Hindenburg report that has caused massive losses for Adani Group companies on the Indian equity markets. The petitions sought an investigation into the Hindenburg’s allegations laid against the Gautam Adani-led conglomerate.
SEBI was represented Tushar Mehta, Solicitor General of India. Re-iterating the apex court’s concern for small investors, the CJI told Mehta, “Probably SEBI is also doing its investigation. Please tell your officers this is no witch hunt that we are planning to do. […] As per some reports, the total loss suffered by Indian investors go in the range of several lakh crores of rupees. How do we ensure that going in future, we have robust mechanisms? Because today, capital is moving in and out of India seamlessly. How do we ensure in future that Indian investors are protected?”
Since the Hindenburg report came out on January 25, listed companies of the Adani Group have been under immense selling pressure, leading to a cumulative market cap loss of more than Rs 10 lakh crore. The report alleged that Adani is guilty of committing fraud and manipulation that resulted in inflated stock prices of Adani Group companies.
The Hindenburg report also led to increasing international pressure on Adani Group, the latest manifestation of which is that MSCI reduced the weightages of four Adani Group companies in its emerging markets index.