Adani-Hindenburg Report| Plea before Supreme Court seeks constitution of fresh 'Expert Committee'; questions integrity of 3 present members

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It has been sought that a fresh expert committee consisting of experts from the field of finance, law and stock market, who have impeccable integrity and no conflict of interest in the outcome of the instant matter, be appointed

A fresh application has been moved before the Supreme Court seeking the constitution of a fresh expert committee to investigate the allegations made against the Adani Group in the Hindenburg Report.

Notably, in March, the Top Court had constituted an expert committee headed by former Justice AM Sapru also consisting of OP Bhat (former Chairman of SBI), retired Justice JP Devadhar, KV Kamath, Nandan Nilakeni, and Somasekharan Sundaresan as the members.

Filed through Advocate Ramesh Kumar Mishra, the instant application has questioned the integrity of three member of the court-appointed committee, namely, OP Bhatt, KV Kamath and Somasekharan Sundaresan.

With regard to OP Bhatt, the former chairman of State Bank of India, it is stated that he is presently working as the Chairman of Greenko, which has been working in a close partnership to provide energy to Adani Groups facilities in India since March 2022. In this backdrop, Court has been told that there is a clear conflict of interest which should have been pointed out by Bhatt himself.

Bhatt was examined by the CBI in March 2018 in a case of alleged wrongdoing in disbursing loans to the former liquor baron and fugitive economic offender, Vijay Mallya and he served as the SBI chairman between 2006 and 2011 when the majority of these loans were advanced to Mallya’s companies, the applicant has added.

For KV Kamath, the applicant has pointed out that he was the chairman of ICICI Bank from 1996 to 2009, and figured in CBI FIR in the ICICI Bank fraud case which relates to Chanda Kocchar who served as the Managing Director and CEO of ICICI Bank from 2009 to 2018.

Lastly, court has been informed that Somashekhar Sundaresan has been a lawyer representing Adani before various forums including the SEBI Board.

Accordingly, the application submits an apprehension that the present expert committee would fail to inspire confidence among the people of the country.

Last week, a fresh affidavit was filed before the Top Court in the Hindenburg-Adani case stating that SEBI had concealed a January 2014 Directorate of Revenue Intelligence (DRI) alert about Adani having siphoned off money and invested it in Adani-listed companies through entities based in Dubai and Mauritius,

A letter dated 31.01.2014 was issued to SEBI, alerting stock market manipulation by the Adani Group which was accompanied by a CD containing evidence of siphoning Rs. 2323 crores. 

It is the allegation of the petitioner that neither any action was taken on this DRI alert nor was it placed by SEBI before the Court, in any of the proceedings. 

It was further submitted that SEBI has a conflict of interest in the matter of investigating violations of law committed by the Adani Group; Mr. Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas, who is a member of SEBI’s Committee on Corporate Governance looking at offences in connection with insider trading, has his daughter married to Gautam Adani’s son, Karan Adani.

In August, Securities and Exchange Board of India had told Supreme Court that out of the 24 investigations it conducted in the Adani-Hindenburg controversy, 22 are final in nature and two are interim. SEBI also assured the court that it would take appropriate action based on the outcome of the investigations in accordance with law.

Supreme Court had earlier directed the Securities and Exchange Board of India (SEBI) to submit an overall report on the situation after, 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' on January 24. 

A batch of petitions seeking an investigation against US-based Hindenburg Research and others seeking an investigation against Adani Group over allegations made by Hindenburg Research were filed in February. 

On February 17, the top court had reserved its order in these batch while observing that it was inclined to maintain 'full transparency' in the matter.

Case Title: Anamika Jaiswal vs. Union of India