In a significant development, the Supreme Court of India has reinforced the Securities and Exchange Board of India’s (Sebi) ongoing investigation into the Adani-Hindenburg controversy. The apex court dismissed the need for further probes, emphasizing the adequacy of Sebi’s efforts in addressing allegations of accounting fraud and stock manipulation by US short seller Hindenburg Research against the Adani Group.
The Supreme Court’s decision comes amid heightened scrutiny following Hindenburg Research’s allegations against the Adani Group, involving fraudulent transactions and share-price manipulation. Petitioners seeking additional investigations cited a report by the Organised Crime and Corruption Reporting Project (OCCRP) and various newspaper articles, which the court found insufficient to undermine Sebi’s comprehensive investigation.
The apex court, led by Chief Justice D Y Chandrachud, underscored the importance of relying on investigations by specialized regulators over third-party reports or media articles. The court’s stance reinforces the credibility of Sebi’s investigation, dismissing the petitioners’ reliance on external reports as unsubstantiated.
The Supreme Court’s ruling is a setback for the petitioners, who had challenged the adequacy and impartiality of the Sebi probe and sought to rely on newspaper articles or reports by third-party organizations, such as the Organised Crime and Corruption Reporting Project (OCCRP), to question the comprehensive investigation by the market regulator.
The judgment highlights Sebi’s role in safeguarding market integrity and investor interests, showcasing the regulator’s comprehensive approach to the allegations. The apex court ruled out the necessity for inquiries by the Central Bureau of Investigation (CBI) or a special investigation team, deeming Sebi’s efforts sufficient. The court also addressed references to a Directorate of Revenue Intelligence letter concerning Adani’s potential stock manipulation, stating that this matter had been previously settled.
Following the Supreme Court’s decision, Adani group companies witnessed a significant upswing in their share prices. The ruling marks a pivotal moment in the Adani-Hindenburg saga, placing trust in the regulatory process over external reports and media coverage.
Sebi has been given three additional months to complete its over two-year-old investigation, with 22 out of 24 inquiries already concluded. The market and stakeholders will closely monitor the final findings of Sebi’s investigation and their implications for corporate governance and investor confidence in India.
