NEW DELHI: The Supreme Court today rejected a plea to transfer an ongoing probe by the Securities Exchange Board of India (SEBI) into the Adani Hindenburg controversy to a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI), saying there exists no basis for it.
A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra ordered SEBI to complete its probe within three months.
The bench also rejected a charge of conflict of interest against experts committee members as unsubstantiated.
It also directed the Union government and SEBI to consider the experts committee to strengthen regulatory framework.
"SEBI should probe if Hindenburg report resulted in short selling and market downfall and take appropriate action, if any infraction of law is found," the bench directed.
Pronouncing the conclusions of the judgment, the CJI said the power of this court to enter the regulatory framework of SEBI is limited and no valid grounds was raised to direct SEBI to revoke its amendments on FPI and LODR regulations, and the regulations do not suffer from any infirmities.
The apex court said SEBI has completed investigation in 22 out of 24 matters.
Taking into account the assurance of Solicitor General, We direct the SEBI to complete the investigation in the other two cases within 3 months, the bench said.
On November 24, 2023, the court had said that it cannot see Hindenburg report, against Adani group, as ipso facto true state of affairs.
The court had also said that there is no material to doubt SEBIs probe and the impartiality of expert committee members, while reserving its judgment on a batch of pleas seeking court-monitored monitored investigation into the allegations made by US-based short-selling firm Hindenburg Research against the Adani group.
US short seller firm Hindenburg's report in January 2023 claimed "brazen accounting fraud" and "stock manipulation" by the Gautam Adani-led group, triggering a massive rout of the conglomerate in the market.
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