Can't accept Hindenburg's Adani claims as ipso facto correct, no reason to doubt Sebi probe, says Supreme Court
Supreme Court on Friday said it could not accept shortseller Hindenburg Research's allegations of fraud, misgovernance and stock price manipulation by the Adani Group as the «ipso facto true state of affairs,» and that's why it had asked the Securities and Exchange Board of India (Sebi) to inquire into the matter.
An apex court bench rallied behind the regulator, saying it found no material to doubt the Sebi investigation or the impartiality of the expert committee headed by former Supreme Court judge Abhay Manohar Sapre. The panel had been appointed by the top court on March 2 to examine regulatory mechanisms to protect investor interests, following the January report by the US-based shortseller that sent Adani stocks tumbling.
The bench comprising Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra — while reserving judgment on petitions related to the matter — said the court could not proceed on the assumption that the Hindenburg report was true.
«We don't have to accept the Hindenburg report as ipso facto factually correct. That is why we asked Sebi to investigate,» the CJI said.
Chandrachud was responding to counsel Prashant Bhushan's allegations that Sebi's role «remains suspect» as it did not act on relevant information regarding Adani Group.
Protect investors, says apex court
Bhushan said this had been available to the regulator since January 2014, when the Directorate of Revenue Intelligence (DRI) had sent a letter to UK Sinha, then chairman of Sebi.
The CJI said the court cannot doubt a statutory body like Sebi by asking it to initiate a further probe based on media reports.
