On Adani Row, SC Seeks SEBI's Views On Framework To Protect Investors

The Supreme Court on Friday heard PILs seeking a court-monitored probe into US-based short-seller Hindenburg Research's report on Adani firms and sought market regulator SEBI's response by Monday.

The top court has asked SEBI to come and apprise the court on how it can ensure Indian investors are protected in the future, what the existing structure is, and how the regulatory framework can be strengthened.

The bench headed by Chief Justice DY Chandrachud, also comprising Justices PS Narasimha and JB Pardiwala, stated that the SEBI's response contains the existing regulatory framework and the need for putting into place a robust mechanism to protect investors.

"It is said that the total lakh by investors is several lakh crores...How do we ensure the protection of Indian investors...How do we ensure this does not happen in future. What role should be envisaged for SEBI in future," the CJI said.

The bench pondered having an expert committee and also conferring wider powers to SEBI. The court noted that it was just thinking aloud and not making any observation on the merits of the case as the stock markets usually run on sentiments. It then listed the two PILs for hearing on February 13.

"Beyond a certain point, we cannot enter into the policy domain. Can we contemplate having a committee? We can give a wider role to SEBI also," the bench said.

The Solicitor General, appearing for the Securities and Exchange Board of India (SEBI), said the market regulator and other statutory bodies were doing the needful.

The two public interest litigations were filed by advocates Vishal Tiwari and ML Sharma. In his PIL, Tiwari sought directions to constitute a committee monitored by a retired apex court judge to inquire into and investigate the Hindenburg Research report. It also sought direction to set up a special committee to oversee the sanction policy for loans of over Rs 500 crore given to big corporates.

Last week, another PIL was filed in the apex court by advocate M L Sharma seeking prosecution of short seller Nathan Anderson of US-based firm Hindenburg Research and his associates in India and the US for allegedly exploiting innocent investors and the “artificial crashing” of Adani Group’s stock value in the market.