Supreme Court: No Ground To Doubt SEBI Probe On Adani

In a major relief to the Securities and Exchange Board of India (SEBI) and the Adani Group, the Supreme Court on 3 Jan refused to form a Special Investigation Team (SIT) or direct the Central Bureau of Investigation (CBI) to probe US short-seller Hindenburg Research's charges against the Adani Group. SEBI is the capital markets regulator in India and is already carrying out a probe into the Adani Group. On 24 Jan 2023, Hindenburg posed 88 questions on the holding patterns of the Adani Group, implying that insider trading led to an erosion of about $150B in market capitalization before stock prices recovered steadily through the year. The Supreme Court stated that it cannot enter into the domain of the regulatory board, and the reports in the media — by Hindenburg or any other — cannot become the basis of ordering a separate probe. The SEBI will continue its probe as per the law, the apex court said, ordering SEBI to finish its investigation within three months. The bench comprising Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra delivered the judgment. The judgment has implications on the Adani Group which is widely known to be close to Prime Minister Narendra Modi and therefore protected by the current regime. This was especially evident when the regime implemented the draconian Farm Laws, and sold airports, seaports, coal, and other mines to the Adani Group. The Supreme Court’s refusal bolsters the regime’s stance in never having answered questions by the Opposition on the links between Gautam Adani and PM Modi. The judgment also has negative implications on investor confidence in the stock market and the transparency of its systems.