An appeal has been filed before the Supreme Court challenging the court registry's refusal to list an application which had sought a status report from the SEBI on the action taken to address allegations of fraud by US short-seller Hindenburg Research against the Adani group of companies.
Case Background
In the January 3 order, the Supreme Court chose not to intervene or push for further action based on the Hindenburg allegations. The Court noted:
"It could not go by newspaper reports on the controversy or supplant its views for that of experts, while leaving it to SEBI to decide if any further action was required in the matter."
The timeline mentioned in this order, according to Tiwari, implicitly set a deadline for SEBI to complete its investigation. However, since this period had passed without a report being filed, Tiwari attempted to file a fresh application with the Supreme Court, requesting the submission of SEBI's investigation report and a status update on the implementation of suggestions made by a Court-constituted Expert Committee.
Court Registry’s Refusal and Grounds for Appeal
On August 5, the Court’s Registrar declined to register Tiwari’s application, labeling it "thoroughly misconceived" and asserting that it failed to disclose any reasonable cause. The Registrar's order emphasized:
"The Hon'ble Court did not give any directions either to the Union Government or the SEBI to submit a status report or conclusive report to this Hon'ble Court. In the absence of any such categorical direction to the Union Government and SEBI to submit the report(s), this application for direction for compliance... is wholly misconceived."
Tiwari’s appeal against this refusal argues that the rejection has effectively barred him from exercising his Fundamental Rights, thereby closing the doors of the Hon’ble Court to his petition permanently. Tiwari has stressed the importance of transparency, especially for the public and investors who suffered losses following the publication of Hindenburg’s report against the Adani group in 2023.
New Allegations and SEBI’s Response
Adding fuel to the fire, Hindenburg Research released a new report on August 10, once again accusing the Adani group of stock manipulation. The report also leveled serious allegations against SEBI Chairperson Madhabi Puri Buch, suggesting possible conflicts of interest due to her and her husband’s alleged stakes in offshore companies linked to Adani entities.
Tiwari’s latest plea highlights these new allegations, emphasizing the need for SEBI to conclude its investigations and publicly disclose its findings. The plea contends:
"The (August 10) report comes a year and a half after its damaging report on the Adani Group that had far-reaching consequences, including the cancellation of the company's flagship Rs 20,000 crore follow-on public offer ... this all has created an atmosphere of doubt in the minds of public and investors and in such circumstances, it becomes incumbent for SEBI to conclude the pending investigations and declare the conclusion of the investigations."
In response to the renewed allegations, SEBI urged investors to remain calm and assured them that the allegations against the Adani group have been thoroughly investigated. SEBI stated:
"Chairperson has also recused herself in matters involving potential conflicts of interest."
Conclusion
The transparency of the regulatory investigations have made its way under the scanner as the appeal makes its way towards the Supreme Court involving an big name like that of Adani. The ruling to this case will set a precedent for further investigative cases like this. As the legal battle unfolds, it is likely to capture the attention of investors, policymakers, and the public, all of whom are eager for clarity on an issue that has already had significant repercussions on the Indian market.
TAGS: Supreme Court of India SEBI (Securities and Exchange Board of India) Adani group Hindenburg Research Vishal Tiwari fraud allegations stock manipulation defamation court registry status report
