The Centre has no objection to form a committee to suggest how to ensure investors are protected, Solicitor General Tushar Mehra told the Supreme Court on Monday at the hearing on pleas seeking inquiry into allegations of unfair trade practices by the Adani Group, reported Live Law.
However, Mehta said that the Centre would provide the names of members of the panel. He also told the court that Securities and Exchange Board of India is capable of handling the fallout in the markets caused due to the report by United States-based investment firm Hindenburg Research that had levelled the allegations against the Adani Group.
The Supreme Court agreed to the Centre’s suggestion and said it would pass an order on the matter after the government makes its submission on the committee. On SEBI, the court added that it did not want to undermine the competency of the markets regulator.
The statement came three days after the court had expressed concern about the rout in shares of the Adani Group, saying that investors have suffered losses running into several lakh crores. On Friday, the Supreme Court had sought views of the Centre and SEBI on how a more robust mechanism can be installed to protect investors and also proposed forming a committee.
The ports-to-energy conglomerate led by billionaire Gautam Adani has been steeped in a crisis since January 24, when Hindenburg Research alleged that the group has amassed substantial debt by pledging overvalued shares. Since the report was released, Adani Group companies have lost nearly Rs 9 lakh crore in the stock market bloodbath.
In a brutal fallout, Adani Group flagship company Adani Enterprises was also forced to call off its Rs 20,000 crore follow-on public offering that was meant to repay debt. The Adani Group has alleged that the report’s “principal objective” was to derail the share offer.
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The court was hearing two petitions filed by Advocate Manohar Lal Sharma and Vishal Tiwari
In his plea, Sharma had sought directions to SEBI and the home ministry to conduct an investigation and register a first information report against Hindenburg Research founder Nathan Anderson and his associates in India.
He has accused Anderson and his associates of hatching a criminal conspiracy by short-selling Adani stocks before releasing their report. Investment research firms like Hindenburg often engage in “activist short selling”, or publicising information about companies to trigger a fall in their share prices.
On the other hand, Tiwari has sought the formation of a committee under a retired Supreme Court judge to investigate the Hindenburg Research report.
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