In its ruling termed Vishal Tiwari v Union of India, the Indian Supreme Court on Wednesday refused to transfer investigations against Indian multinational conglomerate, the Adani Group, to a Special Investigation Team or the Central Bureau of Investigation. The ongoing probe against purported stock manipulation is currently spearheaded by the Securities and Exchange Board of India (SEBI), which has been directed to bring to an end the remaining two out of 24 investigations within the subsequent three months.
In its judgement, the Supreme Court highlighted the restricted role played by the court within the SEBI’s regulatory space, confining intervention to instances where basic human rights are breached or manifest arbitrariness takes place. The court dismissed requests to revoke SEBI’s amendments, upholding augmented regulations, and urging SEBI to quicken pending inquiries.
SEBI had brought into effect changes to the SEBI (Foreign Portfolio Investments) Regulations, 20143 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which according to the petitioner, resulted in increased opacity. However, the court effectively dismissed any contentions to transfer investigations from SEBI, and further dismissed claims surrounding lax investigation and conflicts of interest.
The Court deemed the petitioner’s reliance on third-party reports and correspondences as not providing conclusive evidence. Nonetheless, it encouraged the Union government and SEBI to consider the Expert Committee’s propositions to make the regulatory framework more robust. Moreover, SEBI and investigating agencies were directed to examine potential legal breaches in regard to losses suffered by Indian stockholders, with any identified infractions necessitating appropriate action.
In response to the judgement, Gautam Adani, Chairman of the Adani Group, tweeted, stating, “The Hon’ble Supreme Court’s judgement depicts that truth has ultimately prevailed. Satyameva Jayate [Truth alone triumphs]. I am thankful to those who stayed beside us. Our humble input in India’s growth narrative will keep going. Jai Hind (Hail India).”
In contrast, Manish Tewari, Advocate and Member of Parliament of the Indian National Congress, the main opposition party in India, commented on the order saying that he had not examined the SC order in detail. He reinforced the notion that the allegations brought into public light by the Hindenburg report a year ago could have been resolved much earlier if SEBI had been more attentive or fast in their proceedings.
It’s noteworthy that the Supreme Court had earlier ordered a probe into the accusations of business malpractice against the Adani Group in March 2023, that were predominantly based on a research report by Hindenburg. This report meticulously detailed a two-year investigation into the Adani Group, alleging stock price manpulation. The court directed SEBI to investigate potential failures concerning the disclosure of transactions with related parties and stock price manipulation. Following these allegations, a panel of experts led by a former Supreme Court judge was appointed to enhance the mechanisms for investor safeguarding. The Hindenburg report claimed that the group’s activities had led to an estimated $135 billion USD loss for numerous listed companies, a claim that was vehemently denied by the Adani Group.
An ongoing debate within the Indian political landscape is based on the close ties between Gautam Adani and the top brass of the incumbent ruling party. The main opposition claims that these bonds have facilitated the Indian government’s protection of the Adani Group.
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