Supreme Court bench led by Chief Justice of India D.Y. Chandrachud has directed SEBI to probe alleged violations of the securities act. It may be recalled that the court had earlier reserved its order on February 17 while hearing public interest litigations (PILs) seeking a probe relating to Hindenburg report on the Adani Group.
The order also notes that “it appears that SEBI is seized of the allegations and has not expressly referred to investigation in violation of minimum public shareholding norms.”
SEBI has also been ordered to probe whether there has been a failure to disclose related party transactions and/or a violation of norms on manipulation of share prices.
The Apex court has allotted a two-months deadline to SEBI to submit its report to an expert panel. The court also clarified that the constitution of expert panel does not amount to divesting SEBI of its power, jurisdiction and responsibility to probe these issues.
The committee will be headed by Justice Abhay Manohar Sapre, a retired Supreme Court judge. Others members of the committee include O.P. Bhatt, K.V. Kamath, Nandan Nilekani and Somsekhar Sundaresan.
The panel has also been asked to suggest measures for strengthening existing regulatory framework.
The Hindenburg’s report, released on January 24, claimed “brazen accounting fraud” and “stock manipulation” by the Gautam Adani-led group. Though the conglomerate rejected the report as “unresearched” and “maliciously mischievous”, it triggered a massive rout of Adani Group stocks, with the flagship firm losing over $120 billion in days, and forcing the cancellation of a ₹20,000 crore secondary share sale after it had scraped through.
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