Supreme Court reserves order in Adani-Hinderburg case

The Supreme Court on Friday reserved the order in the Adani-Hinderburg case after hearing multiple pleas in the matter. A bench led by the Chief Justice of India DY Chandrachud said that the apex court cannot doubt market regulator Sebi's probe into the case by just relying on media reports.

Some petitioners told the top court that the reports published by the Financial Times and Guardian show discrepancies in the probe and that certain funds were run by Gautam Adani's brother Vinod Adani. “Sebi said we have completed investigation reports, but have not disclosed them,” they added.

Here are the top highlights of the proceedings today:

1. The court also observed that market regulator SEBI must complete the probe in all 24 cases. Earlier, Sebi in its status report on August 25 said it has completed its investigation in 22 out of the 24 cases.

2. The Supreme Court on Friday observed that the Hindenburg Research report should not be treated as a statement of truth.

3. While hearing petitioners plea on the factual revelations made in the Hindenburg report, the apex court said: "We don't have to treat the Hindenburg report as being a statement of truth. There is no means of testing the varacity of the Hindenburg report and hence asked SEBI to probe."

4. The Supreme Court also observed that Sebi can’t be asked to take a story in a newspaper, even if in Financial Times, as gospel truth. “Should SEBI begin chasing journalists who don’t fall under its jurisdiction?”

“How is it that journalists can get these docs on controlling interest of Vinod Adani, but SEBI with all its powers cannot get access for years,” the petitioner said.

5. The petitioners told SC that the reports published by the Financial Times and Guardian show that certain funds were run by Vinod Adani. “Sebi said we have completed investigation reports, but have not disclosed,” they added.

Then the court observed: “Can SEBI be asked to disclose findings, even before SEBI can initiate proceedings under law? How can we pre-judge SEBI findings?”

6. The petitioners told the Supreme Court that it should consider a court-appointed SIT. In reply, the Supreme Court said: “Where is the material before us to doubt SEBI probe?”

7. The petitioners, including senior advocate Prashant Bhushan, said that two of the members of expert committee are in conflict and the committee should be reconstituted. “OP Bhatt is a chairman of a company GreenCo Energy, as recently as March 2022. GreenCo was partnering with Adani.” 

They added that Somsekhar Sundaresham has been the counsel for Adani Group.

8. On reconstitution of the expert committee, the SC bench said it will be very unfair to the committee and people will stop working in the Supreme Court-appointed committee. “We didn’t appoint judges but industry veterans to bring expertise in assessing the issue.”

The court questioned why should they take these unsubstantiated allegations. “We should disqualify Somsekhar because he appeared 17 years ago for a certain party? By this logic, no lawyer can become a judge,” the bench observed.

9. The petitioners told the Supreme Court that the actions of the market regulator are suspicious as they have had the details since 2014. The Directorate of Revenue Intelligence (DRI) had shared details with the SEBI Chairman in 2014.

Petitioners noted that in 2014, DRI had estimated over invoicing of equipment to the tune of Rs 6,700 crore. “The DRI conveyed that parts of siphoned money was routed through Dubai, Mauritius back to Adani group companies,” the petitioners said on Friday.

To this, Sebi counsel claimed ignorance in this matter. The Supreme Court observes that a probe on overvaluation would fall with the DRI only.

10. Sebi told SC that it will not be asking for any more extension to complete its probe in the Adani-Hindenburg matter. 

Chief Justice of India DY Chandrachud on Friday, while hearing the case, asked the market regulator what it has been doing on investor value and if it is ensuring their protection. To this, Sebi's counsel Solicitor General Tushar Mehta said action has been taken against short-sellers on instances found. 

11. The Solicitor General told the court that Organised Crime and Corruption Reporting Project (OCCRP) prepared a report, but refused to share the details.

“When we approached them, sought details, we were refused those details, they cited a source. Self-serving reports based on conjecture, attention would be diverted in looking at these reports,” Solicitor General Mehta told the court.

 

Also read: Adani-Hindenburg case: 'What has SEBI done to probe volatility in market,' asks SC

Also read: Adani-Hindenburg case: 'Don't have to treat Hindenburg report as a statement of truth,' says SC