CJI expresses concerns over short selling in Adani-Hindenburg row

In the ongoing case related to the Securities and Exchange Board of India (SEBI) probe into the Adani-Hindenburg matter, Chief Justice of India D Y Chandrachud expressed concerns about short selling and market volatility in the stock market.

The matter is being heard by a bench headed by Chief Justice DY Chandrachud. One of the petitioners in the case has sought contempt of court proceedings against SEBI for not completing its probe into the stock manipulation allegations against the Adani group on time.

Solicitor General Tushar Mehta informed the court that out of the 24 identified cases for investigation, 22 probes have already been completed by SEBI. However, for the remaining two cases, information is needed from foreign regulators, and the timeline for obtaining this information is uncertain.

Chief Justice Chandrachud raised concerns about the extreme volatility in the stock market, prompting SEBI to take measures to protect investor value. He specifically inquired about SEBI's actions regarding short selling and whether any wrongdoing had been identified in this aspect.

“We had intervened because of the extreme volatility of the stock market… what is SEBI planning to do to protect investor value… like strengthening the guidelines... steps for protection of investors in cases like short selling etc as it happened. Have you found any element of wrongdoing in the aspect of short selling so far?” the CJI asked.

In response, Solicitor General Mehta stated that wherever short selling was identified, appropriate actions have been taken. He also mentioned that SEBI has no objection to the recommendations of an expert committee for strengthening the regulatory mechanism. These recommendations are currently under consideration, and in principle, SEBI has accepted them.

The Chief Justice, acknowledging time constraints, scheduled a continuation of the hearing for 2 pm.