19 Nov 2023 8:14 AM GMT
An application has been filed in the Supreme Court seeking the initiation of contempt proceedings against the Securities and Exchange Board of India (SEBI) for not completing its investigation into the Adani-Hindenburg matter despite the timeframe fixed by the Court.
The applicant, Advocate Vishal Tiwari, one of the petitioners who filed PIL seeking a Court-monitored probe on the issue, pointed out that as per the order passed on May 17, the SEBI was supposed to submit its report by August 14. However, the market regulator is yet to submit its final report.
In this backdrop, Tiwari sought a direction to the SEBI to explain its non-compliance. He sought a further direction to initiate contempt proceedings against the SEBI for not complying with the order dated May 17.
Tiwari also referred to the recent report published by by the Organised Crime and Corruption Reporting Project (OCCRP) against Adani Group companies alleging stock market manipulation. He sought a direction to the Expert Committee constituted by the Supreme Court to inquire into the OCCRP report. The applicant further directed the Government and the SEBI to implement the suggestions made by the Expert Committee to strengthen the regulatory framework.
The batch of petitions concerning the Adani-Hindenburg matter is yet to be listed in the Supreme Court, though the matter was scheduled to be heard on August 29, 2023. On November 6, Advocate Prashant Bhushan, had mentioned the matter before the Chief Justice of India seeking urgent listing.
"The matter was to be listed on 29th August but it has been deferred," Bhushan had said. CJI DY Chandrachud then had assured that he will examine the matter with the Registry.
On January 24, US-based short-selling firm Hindenburg Research, published a scathing report accusing the Adani Group of widespread manipulations and malpractices aimed at inflating its stock prices. In response, the Adani Group vehemently refuted the allegations by publishing a comprehensive 413-page reply.
Subsequently, a group of Public Interest Litigations (PILs) was filed in the Supreme Court by Advocates Vishal Tiwari, ML Sharma, Congress leader Dr. Jaya Thakur, and activist Anamika Jaiswal. These PILs sought a court-monitored probe into the matter. On March 2, the Supreme Court constituted a committee to investigate examine if there is any regulatory framework in the matter. The SEBI was also directed to probe into the allegations against Adani group. The expert committee was composed of Mr. OP Bhat (former Chairman of SBI), retired Justice JP Devadhar, Mr. KV Kamath, Mr. Nandan Nilekani, and Mr. Somasekharan Sundaresan, with former Supreme Court judge Justice AM Sapre heading the committee.
The two months’ time originally allowed by the apex court for SEBI as per its March 2 order ended on May 2.
However, in May, the SEBI filed an application in the Supreme Court, requesting a six-month extension to complete its probe. In its affidavit, SEBI had stated that the transactions in the matter were complex and required more time to examine. SEBI also informed the apex court bench that it had already approached eleven overseas regulators under the Multilateral Memorandum of Understanding (MMOU) with International Organisation of Securities Commissions (IOSCO) with respect to its investigation into Minimum Public Shareholding (MPS) norms the investigation required more time.
The Supreme Court initially refused to grant a full six-month extension but extended the deadline to August 14, 2023. The bench had passed the extension order on May 17. As the second deadline was set to end, SEBI requested an additional 15 days to complete its investigation. In its application, SEBI informed the court that "it has progressed substantially". The market regulator further said that in one matter, an interim report had been prepared on the basis of the materials available and that it had sought information from agencies and regulators in foreign jurisdictions, etc. and upon receipt of such information, it would evaluate the same to determine further course of action, if any.
The case was then scheduled to be listed on August 29, 2023, but as of November 2023, it has not yet been listed for hearing.
Case Title: Vishal Tiwari v. Union of India & Ors. | Writ Petition (Civil) No. 162 of 2023 and other connected matters