Adani-Hindenburg Case: Supreme Court Reserves Verdict, Says SEBI Can’t Decide Based On Media Reports

New Delhi: The Supreme Court on Friday reserved its verdict on the Adani-Hindenburg case.

A three-judge bench comprising Chief Justice of India (CJI) DY Chandrachud, Justices JB Pardiwala and Manoj Misra was hearing a batch of petitions seeking an examination of allegations of fraud against Adani Group of companies in the Hindenburg Research report.

In a significant observation, the top court also said that the Securities Exchange Board of India (SEBI) can’t be expected to follow newspaper reports to decide on Adani’s alleged conduct, reported Bar and Bench.

Advocate Prashant Bhushan, appearing for one of the petitioners, argued that SEBI’s conduct in the matter had not been credible.

“We have come to the conclusion that the SEBI probe is not credible. They say 13 to 14 entries are linked to Adani but they can’t look into it because the FPI guidelines were amended,” Bhushan said.

The Court pointed out that the securities market regulator cannot be asked to go by what the media has to say on the subject.

“Mr Bhushan, I do not think you can ask a financial regulator to take something printed in the newspaper.. This does not discredit SEBI.. Should SEBI now follow journalists?” Justice Chandrachud asked.

“If journalists are getting these documents, how can SEBI not get it? Which shows that Mr Vinod Adani was controlling these funds? How could they not get these documents for so many years? The OCCRP, The Guardian etc have shown that most of these offshore companies investing in Adani stocks were controlled by Vinod Adani,” Bhushan replied.

The CJI insisted that the SEBI can’t act against entities based only on newspaper reports.

“How can this be of any evidentiary value, complying with the principles of natural justice? How can a show cause be there in such a case? We cannot make an assumption that it is credible or lacking in credibility,” the CJI said.

The Hindenburg report earlier this year alleged that Adani had inflated its share prices.

Supreme Court had asked SEBI to investigate the matter, and also constituted an expert committee headed by retired Justice AM Sapre to look into the matter.

In its report released in May, the expert panel found no prima facie lapse on SEBI’s part in the matter.