Supreme Court to the Center on the Adani issue: “Won’t accept sealed cover suggestions”

In the previous hearing on the subject, which was held on February 10, the Supreme Court prioritized Indian investors' interests against the backdrop of the collapse in the value of the Adani Group shares.

The Supreme Court rejected the Center’s statements contained in a sealed cover made during the hearing on the accusations made against Adani Company by US-based Hindenburg Research. The Supreme Court informed the federal government on Friday that it aimed to retain “complete openness” in the proceeding and even rejected requests for an expert committee.  Indian Journo - Digital News Portal

In the previous hearing on the subject, which was held on February 10, the Supreme Court prioritized Indian investors’ interests against the backdrop of the collapse in the value of the Adani Group shares. The Supreme Court ruled earlier today that no one should be able to criticize the committee as it was assembled by the judges or make any comments on the panel’s qualifications.  

A bench made up of Chief Justice DY Chandrachud, Justices P S Narasimha, and J B Pardiwala argued in favor of retaining “full transparency” in the best interests of investors, and they preferred not to accept the Center’s recommendation behind a sealed cover. 

“When we agree on a set of recommendations inside a sealed cover, the other side won’t be aware of it. To safeguard investors, we demand complete transparency. We’re going to form our committee. “To provide complete openness to investors,” “declared CJI Chandrachud. The bench said throughout the hearing that the judges themselves would constitute the committee, without the Center’s involvement. The bench ruled that there can be no assumption of regulatory failure at the outset. The court ruled that neither the Center’s nor the petitioners’ ideas would be taken into consideration.Petition filed in Supreme Court against Hindenburg Research, seeking compensation for investors of Adani Group – न्यूज़लीड India

The court said, “We don’t want sealed cover recommendations, and we don’t want a government-appointed committee. The bench stated that “there needs to be a sense of trust among the investors and the broader public. The judges said that all parties involved should work with the committee and they did not want any claims of “bias. A Supreme Court judge who is now serving has also been explicitly prohibited from joining the committee by the Supreme Court.

What Is The Case?

The ports-to-energy conglomerate of Gautam Adani fought US-based short-sellers on charges of stock manipulation and accounting fraud against the once-richest Asian. After Hindenburg Research raised concerns about tax havens, money laundering, and stock manipulation, the conglomerate’s share prices have fallen, shedding more than half of its market worth.SC collegium makes decisions on judges' appointments public, two years after it struck down NJAC  

It is important to note that the Adani group has called the accusations false and insisted that it complies with all regulations. In only six trading sessions, the ten listed Adani Group companies have seen their aggregate value erode by more than Rs 8.5 lakh crore. Adani Enterprises also announced the cancellation of a Rs 20,000 crore share sale, citing the importance of investors’ interests. The Securities and Exchange Board of India (Sebi) stated that all necessary surveillance systems are in place to control any excessive volatility in individual shares.

Adani vs Hindenburg

The Adani Enterprises case was brought before the Supreme Court of India following the filing of a public interest complaint requesting an investigation into the US-based business Hindenburg Research, whose report significantly decreased the value of Adani Group shares on the stock market.The Securities and Exchange Board of India, a market regulator, has also been asked to look into the short seller and its allies for “exploiting and duping lakhs of innocent investors” (SEBI).  

Advocate ML Sharma, who wrote the PIL, said he wants to investigate the US-based short-selling business and Nathan Anderson, who founded it. Sharma claims that the study critical of the Adani Group was created “deliberately” by short-seller Hindenburg Research just before the Adani Group’s Rs 20,000 billion follow-on public offer (FPO).Sharma stated that the corporation needs to be investigated and penalized for causing investor losses.

He demanded that the short seller make up for the substantial stock market losses experienced by those investors throughout the preceding six sessions. The devastating research, which charged Adani Enterprises with market manipulation and accounting fraud, caused the company’s shares to drop 76% from their all-time high in December in only 31 trading days. According to the paper, the company is purportedly conducting the “biggest fraud in corporate history.

The stock fell to a 52-week low of Rs 1,017.10 on Friday, February 3, plummeting 75.72 percent from its peak. It reached its all-time high of Rs 4,189.55 on December 21, 2022. The market value of Adani Enterprises has decreased by more than 2.88 lakh crore. At the end of trading on December 21, 2022, the company’s market capitalization was Rs 4.45 lakh crore.

In its research, Hindenburg Research alleged “brazen stock manipulation, money laundering, and accounting fraud schemes over decades” by the corporation. According to the short seller, the report was summarized following a two-year inquiry. The Adani Group defended itself by describing Hindenburg’s study as “maliciously nasty and unrehearsed,” claiming that it hurt the Adani Group, its shareholders, and investors. Amid Collegium row, Centre tells Supreme Court names of 44 judges to be cleared by tomorrow - India Today 

In a 413-page response to the 106-page Hindenburg Research report, the ports-to-power conglomerate alleged that “this is not merely an unjustified attack on any specific company but a measured attack on India, the secession, integrity, and quality of Indian institutions, as well as the growth story and ambition of    “It is highly distressing that the comments of an organization sitting thousands of kilometers away, with no integrity or ethics, have caused a significant and unprecedented negative impact on our investors,” the Adani Group stated.


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