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Updated January 3rd, 2024 at 07:56 IST

Supreme Court to deliver verdict today in Adani-Hindenburg Case

The judgement is scheduled to be pronounced by the CJI, and the case has been under consideration since November 24.

Reported by: Business Desk
Gautam Adani
Gautam Adani | Image:Gautam Adani
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The Supreme Court (SC) is set to deliver its verdict today on a series of petitions calling for an investigation into allegations of accounting fraud and stock manipulation against Adani group companies. These allegations were outlined in a research report by US short-seller Hindenburg Research in January last year.

The bench, consisting of Chief Justice of India Dhananjaya Y Chandrachud and justices JB Pardiwala and Manoj Misra, will also rule on the measures that the Securities and Exchange Board of India (SEBI) should take to safeguard investors from extreme market volatility and the tightening of relevant regulations. The judgement is scheduled to be pronounced by the CJI, and the case has been under consideration since November 24, following the conclusion of arguments.

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Hindenburg Research's report in January 2023 alleged "brazen accounting fraud" and "stock manipulation" by the Gautam Adani-led group. While the conglomerate dismissed the report as "unresearched" and "maliciously mischievous," it led to a notable decline in Adani group stocks, resulting in a loss of over $140 billion and the cancellation of a €20,000 crore share sale.

In March last year, the Supreme Court established a six-member panel, headed by retired Supreme Court judge AM Sapre, to investigate regulatory failures by SEBI and potential breaches of laws by the Adani group.

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In its May report, the committee stated that the allegations of stock price manipulation or violation of MPS norms by Adani group companies could not be proven "at this stage." However, the panel raised concerns about current Foreign Portfolio Investors (FPI) regulations, highlighting changes made by SEBI in 2018 and 2019 that eliminated the prohibition against FPIs having an “opaque structure.”

During the November 24 reservation of judgement, the bench stressed that it would not be appropriate to appoint an SIT to investigate alleged violations of MPS norms by Adani group companies without evidence of lapses by SEBI, which was already conducting its own investigation. 

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The court stressed that regulatory actions should not be based solely on media reports and that SEBI, as a statutory regulator, cannot be expected to issue show-cause notices based on reports from entities like Hindenburg or media organisations such as the Financial Times.

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Published January 3rd, 2024 at 07:05 IST

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