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Supreme Court grants three months to Sebi to complete probe into Adani group

The bench advised against any roving inquiry when a petitioner and the Centre’s representative locked themselves in an argument over another probe dating back to 2016

R. Balaji New Delhi Published 18.05.23, 05:49 AM
Gautam Adani.

Gautam Adani. File Photo

The Supreme Court on Wednesday granted three months to Sebi to comp­l­ete its Adani probe, going halfway on the six months sought by the market regulator.

The Chief Justice of India remarked orally that the ambit of the investigations shall be confined to the claims made in the Hindenburg report that had alleged stock market manipulation and accounting fraud by the Adani group.


The bench advised against any roving inquiry when a petitioner and the Centre’s representative locked themselves in an argument over another probe dating back to 2016. The petitioner had sought details of the 2016 probe.

A bench headed by Chief Justice of India D.Y. Chandrachud passed the order while dealing with an application moved by Sebi seeking a six-month extension to complete the probe on the ground that the inquiry spanned several countries, was complex and required adequate time. The market watchdog said the earlier deadline of May 2 fixed by the court on March 2 was not sufficient.

Touching upon the petitioner’s reference to the separate Sebi investigation linked to 2016, CJI Chandrachud said: “We are on the Hindenburg report and remit of the proceedings is not to have a roving enquiry against the company. It is stated that the 2016 investigations related to global depository receipts and the 2020 probe is relating to the minimum public shareholding (MPS) norms, which is connected to the Hindenburg case also. Let’s not have a roving inquiry.”

The CJI told Mehta the court could have offered time till September 14 for completing the probe but was giving till August 14, by when Sebi must file an updated status report.

The bench, which included Justices P.S. Narasimha and J.B. Pardiwala, listed separately for hearing on July 11 the report submitted by the expert committee headed by former Supreme Court judge, Justice A.M. Sapre, on strengthening the existing regulatory framework of Sebi and other market regulators.

Wednesday’s order was preceded by exchanges between solicitor-general Tushar Mehta, appearing for Sebi, and advocate Prashant Bhushan, representing Anamika Jaiswal, one of the public-interest petitioners seeking a probe into the Hindenburg allegations. The PIL petitioner has claimed that Sebi had been probing the Adani group since 2016 for stock market manipulation, but was not willing to share the details.

Bhushan iterated that Sebi must place on record details of the probe it has conducted since 2016 against the Adani group, as had been acknowledged by Union minister of state for finance Pankaj Chaudhary to a query from Trinamul Congress MP Mahua Moitra on July 19, 2021.

“It is clear that an attempt is being made to shield the Adani company. They must state on record what happened to the investigation being carried out since 2016. If Adani shares increased abnormally by 10,000 per cent and 5,000 per cent, then alarm bells have to be rung,” Bhushan argued. “How did Sebi miss out all these details if they are investigating the matter?”

Mehta countered the argument, saying the court’s March 2 directive was with regard to the allegations made in the Hindenburg report and the minister’s statement was also in the context of Sebi probing in 2020 allegations of stock market violations, not the investigations dating back to 2016.

“You (Bhushan) pick up something in 2016 and then connect it with the Hindenburg report. The issue of 2016 is something totally different (relating to global depository receipts) and distinct from the present matter. They (petitioners) want that whatever investigation was carried out against a company has to be placed. But that is not the remit of this court. The minister in Parliament had stated that Sebi is probing some companies for non-compliance of regulations with regard to certain probes that had commenced in 2020 and the minster’s statement is not for the probe originating in 2016,” Mehta told the bench.

Bhushan persisted with the argument and referred to the references made in Jaiswal’s petition about the question raised by Moitra and the answer of the minister.

“Pease see these Parliament questions and answers that I have submitted. These are the precise companies that the Hindenburg report mentions were investing in Adani. They must be asked to place on record the report of the inquiry,” Bhushan said.

Mehta countered: “I am on the present facts. The 2016 issue is something totally different, distinct and separate. They (petitioners) want that whatever proceedings were undertaken should be placed before the court. That is not the remit of the court, but I have no problem in doing so.” The solicitor-general added he was willing to place on record the probe material relating to 2016 if the court directed him to do so.

Mehta said the allegations in the Hindenburg report were being probed by Sebi and the apex court was monitoring the investigation. He said it was not proper for the PIL petitioners to lay down how the investigation should be conducted.

“My learned friend wants a roving inquiry, but that is not the remit of the court. Six months is the compressed period I am seeking for completing the probe,” Mehta said.

Later, the bench dictated the written order, granting Sebi “an extension of time till 14 August 2023 to submit its report. Sebi shall place on the record an updated status report in regard to the course of the investigation”.

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