Adani-Hindenburg case: SC reserves its judgment

It will not be proper for the highest court of the land to appoint a special investigation team (SIT) to look into alleged violations of minimum public shareholding (MPS) norms by Adani group companies without there being evidence of lapses on part of the Securities and Exchange Board of India's (Sebi's) which is investigating the matter, the Supreme Court observed on Friday.

- Utkarsh Anand

Even as it reserved its judgment on a bundle of petitions demanding investigation into allegations of accounting fraud and stock manipulation against Adani group companies, raised in a research report by US shortseller Hindenburg Research, the court remained emphatic that it cannot order a probe based only on certain media reports and without hearing the entities impacted by its orders.

"Where is the material before us to start doubting Sebi? Sebi is a statutory body exclusively entrusted with investigating stock market manipulation. Is it proper for the highest court of the land to say without any proper material that 'we don't trust Sebi, and we will form our own SIT? This has to be done with a great deal of calibration," a bench led by Chief Justice of India Dhananjaya Y Chandrachud told advocate Prashant Bhushan, who was appearing for one of the petitioners in the case.

The bench, which also comprised justices JB Pardiwala and Manoj Misra, added that it cannot expect a statutory regulator like Sebi to start issuing showcause notices on the basis of reports published by Hindenburg or by a news organisation such as Financial Times.