Adani-Hindenburg Row: SC Sets Up 6 Members Committee, Asks SEBI To Submit Report In 2 Months

A decisive step has been taken by Supreme Court in the Adani-Hindenburg dispute. On Thursday, the Supreme Court has directed SEBI to investigate the case on the priority basis, to check whether there has been violation of Section 19 of SEBI rules or any manipulation has been done of the stock prices. The Supreme Court has also ordered SEBI to submit the status report in two months. The committee will be headed by Retd judge Justice AM Sapre, to deal with the issue of regulatory mechanisms of project investors. A bench will include Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala in the panel, who will make an overall assessment of situation and will suggest measures to make investors aware and strengthening of existing regulatory measures for stock markets.

The top court said the committee would consist of O.P. Bhat, Justice J.P. Devadhar (retired), K.V. Kamat, Nandan Nilekani and Somasekhar Sundaresan. The bench added that the expert committee will be headed by retired justice Abhay Manohar Sapre, a former judge of the Supreme Court. The bench also directed the Centre, financial statutory bodies and the SEBI chairperson to render all cooperation to the panel as they have to submit its report within two months.

Earlier on February 17, Supreme Court refused to accept the sealed cover suggestions by the Centre on the appointment of a committee related to regulatory mechanisms to protect the investors in the drop back of Adani-Hindenburg case and said that full transparency should be maintained. Whereas Solicitor General Tushar Mehta who was appearing for the Centre submitted the sealed cover note saying, “two intentions should be kept in mind, one is that truth comes out and a holistic view is presented and other one is there is an unintended impact on the markets.”

Adani Group welcomes Supreme Court order

After an expert committee was set up by the Supreme Court on Thursday and directed market regulator SEBI to investigate whether the manipulation in the stock prices is done, Adani group has welcomed the order and said that “Truth will prevail.”

The chairman of Adani Group Gautam Adani tweeted, “The Adani Group welcomes the order of the Hon’ble Supreme Court. It will bring finality in a time-bound manner. Truth will prevail.”

In January, Hindenburg alleged stock manipulation and fraud by the Adani Group. After this, Adani Group slammed Hindenburg for the unethical report saying that the report was nothing but a lie.

What is the Hindenburg report on Adani?

In January 2023, Hindenburg said that it has short positions in the Adani Group of India and raised issues with debt and accounting. The Indian giant Adani Group, according to a research by Hindenburg, “has engaged in a brazen stock manipulation and accounting fraud operation over the course of decades.” The share prices of Adani Group companies sharply dropped soon after the publication of the report.

About Hindenburg Research

Hindenburg Research is an investment research firm based in New York City, with a focus on activist short-selling founded by Nathan Anderson in 2017. The firm is named after the 1937, Hindenburg disaster. The firm generates public reports through its website that allege corporate fraud and misconduct. Hindenburg has also exposed many other companies like Nikola, Clover Health, Kandi, Lordstown Motors.

How does the Hindenburg work?

By looking through the target firm’s public records and internal corporate documents, as well as speaking with its workers, Hindenburg Research develops its investigation report on the target company in six or more months. The limited partners of Hindenburg are subsequently given access to the study, and they decide to short the target firm along with Hindenburg. If the share price of the target firm drops, Hindenburg makes money.