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In the impugned judgment, Supreme Court held that investigative reports may act as inputs for SEBI but cannot be taken as proof to show that SEBI has not conducted its investigation properly
A review petition has been filed before the Supreme Court of India against its refusal to transfer the probe against Adani Group over allegations made by Hindenburg Research to an independent agency.
The review plea states that there are apparent errors on the face of the impugned order wherein the Supreme Court rejected the petitioners prayer to constitute a court monitored SIT into the massive fraud involving market manipulation through offshore entities owned by promoters of Adani Group.
"...in PART C of the impugned judgment noted that ‘There is no apparent regulatory failure attributable to SEBI’, whereas, there are many instances through which SEBI's regulatory failures are readily apparent. Such failures have eventually contributed to alleged regulatory contraventions and statutory violations...", the plea adds.
On January 3, 2024, a bench led by CJI DY Chandrachud observed that no willful or deliberate violations were done by SEBI and the court could not ordinarily supplant powers to investigate.
"Supreme Court's power to enter into regulatory domain of SEBI is limited. On assurances given by SG Tushar Mehta, we grant THREE more months to SEBI to complete the pending probes.", the court has ordered further.
The bench also comprising Justices Pardiwala and Manoj Misra added that PIL pleas based on UNSUBTANTIATED reports must not be pursued and the bar and advocates must be conscious of this.
It is to be noted that, last year, the Expert Committee appointed by the Supreme Court to review the regulatory mechanism in the light of Adani-Hindenburg issue had said that prima facie, it is not possible to conclude that there has been a regulatory failure around the allegation of price manipulation.
"As regards the trading period between April 1, 2018 and December 31, 2022 (the calendar month prior to the publication of the Hindenburg Report), the Committee learnt that a total of 849 alerts had been received from the automated system in respect of Adani group scrips. These include online alerts, complaints and references, and were examined by Stock Exchanges, applying the factors listed at the start of this sub-chapter...", their report added.
In March, the Top Court had constituted an expert committee headed also consisting of OP Bhat (former Chairman of SBI), retired Justice JP Devadhar, KV Kamath, Nandan Nilakeni, and Somasekharan Sundaresan as the members.
Notably, 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.
Case Title: Anamika Jaiswal vs. Union of India
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