New Delhi, The Supreme Court is set to deliver its judgment today on a series of petitions calling for an investigation into allegations of accounting fraud and stock manipulation against Adani group companies. These allegations were highlighted in a research report published by US short-seller Hindenburg Research in January 2023.
A bench comprising Chief Justice of India Dhananjaya Y Chandrachud and Justices JB Pardiwala and Manoj Misra will also address the steps the Securities and Exchange Board of India (SEBI) should take to safeguard investors by managing extreme market volatility and tightening relevant regulations. The judgment, reserved on November 24, will be pronounced by Chief Justice Dhananjaya Y Chandrachud.
The Hindenburg report, released in January 2023, accused the Gautam Adani-led group of “brazen accounting fraud” and “stock manipulation.” Despite the conglomerate dismissing the report as “unresearched” and “maliciously mischievous,” it led to a significant decline in Adani group stocks, resulting in a loss of over $140 billion and the cancellation of a €20,000 crore share sale.
On March 2, 2023, the Supreme Court established a six-member panel, headed by retired Supreme Court judge AM Sapre, to investigate regulatory failures by SEBI and alleged violations of laws by the Adani group. The committee, in its report submitted in May, stated that the allegations of stock price manipulation or violation of MPS norms by Adani group companies could not be substantiated at that stage.
The panel raised concerns about the current Foreign Portfolio Investors (FPI) regulations, pointing out that SEBI had eliminated the prohibition against any FPI having an “opaque structure” in 2018 and 2019. The judgment will shed light on these issues and determine the course of action regarding the allegations.
