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A plea has been filed before the Supreme Court seeking directions to set up a committee monitored by a retired Apex Court judge to investigate the Hindenburg Research report.
Solicitor General Tushar Mehta today submitted his apprehension before the Supreme Court on appointing an expert committee to look into the Hindenburg Report.
"Existing agencies are fully equipped. However, responding to your lordships suggestions, we have no objection in constituting a committee. The only thing is, we don't want to send a message that a government agency needs to be overseen by a committee...", the SG submitted before a CJI Chandrachud led bench.
SG added that this needed to be considered as foreign investment must not be hampered.
On hearing this, CJI Chandrachud asked the SG to submit a remit note so that the court could reflect on it.
On Friday, the Supreme Court had directed the Securities and Exchange Board of India (SEBI) to submit an overall report on the situation.
"We have also asked SG Mehta to submit a brief note. SG has assured us that SEBI is closely monitoring the situation. We will keep it on Monday", had observed a CJI Chandrachud led bench.
The bench also comprising Justices Narasimha and Pardiwala had thus ordered that the report may consist of details like the existing regulatory framework, relevant causal factors, the need for putting into place robust mechanisms to regulate the market etc.
When the case was taken up, CJI had questioned SG Mehta, appearing for SEBI, as to how the Indian investors could be protected in situations like the present one.
"If something like this causes a total loss suffered by Indian investors may go to 7 lakh crores...how do we ensure going in future that the investors are safe... and they are protected. How do we ensure this does not happen going forward?", the CJI had said.
Court had then asked the SG to get some input from the government and come back on Monday, February 13.
"Maybe you can come back to us on Monday...with inputs. Maybe a committee can be formed. We are also not sure, we are also thinking aloud. You may also give a vital role to SEBI, it may do a threadbare analysis of its powers, the powers it may need in the future...", the bench had further observed.
CJI Chandrachud led bench had last week agreed to hear the instant plea which also sought direction to set up a committee monitored by a retired apex court judge to investigate the Hindenburg Research report.
The Supreme Court also took up Advocate ML Sharma's petition which seeks to declare 'short-selling' as an offence of fraud. The said petition seeks an investigation against Nathan Anderson, the founder of Hindenburg, "for exploiting innocent Investors via short selling under the garb of artificial crashing".
On January 24, a US-based investment research firm named Hindenburg Research published a report titled 'Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History', making allegations against the conglomerate, saying that the group has been involved 'in a brazen stock manipulation and accounting fraud scheme over the course of decades.'
The report led to a stock rout, erasing over $ 100 billion from Adani's empire and pushing him down on the global rich list. Also, the report came two days before a $2.5 billion follow-up public offering was issued by Adani Enterprises.
Case Title: Vishal Tiwari vs. Union of India
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