In a significant development, the Supreme Court has ruled in favor of the Adani Group, affirming the Securities and Exchange Board of India’s (SEBI) investigation into the Hindenburg case. The court dismissed the legitimacy of the OCCRP report, funded by figures like George Soros, as a basis for questioning SEBI’s probe. The bench, led by Chief Justice DY Chandrachud, stated that there are no grounds to transfer the investigation to a Special Investigation Team (SIT).
SEBI has scrutinized 22 out of the 24 cases related to allegations from the US-based short seller Hindenburg Research. The Supreme Court has granted SEBI three months to conclude the investigation in the remaining two cases. Additionally, the court has directed the government and SEBI to examine whether Hindenburg adhered to market shorting rules and take appropriate actions.
Chief Justice Chandrachud emphasized that reliance on the OCCRP report is rejected, stating, “The reliance on a third-party organization report without any verification cannot be used as proof. There are no grounds to transfer the probe in this case from SEBI.” The judgment echoed the court’s previous stance that the Hindenburg allegations and OCCRP report targeting the Adani Group cannot be considered definitive.
The Supreme Court highlighted the need for research-backed petitions, stating, “Petitions that lack adequate research and rely on unsubstantiated reports cannot be accepted.” The Adani Group had faced allegations of inflating share prices and subsequent sharp declines following Hindenburg Research’s report in January last year.
The court clarified that public interest jurisprudence requires rigorous evidence, cautioning against treating newspaper reports and third-party organizations as conclusive evidence to question SEBI’s probe.
Solicitor General Tushar Mehta, representing SEBI, mentioned that the regulatory body had completed investigations into 22 cases, with information awaited from foreign agencies for the remaining two.
The decision underscores the court’s reluctance to transfer investigations to an SIT without strong justification, emphasizing that such a power should be used only under exceptional circumstances.
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