Adani-Hindenburg case: Supreme Court sets up expert panel

The Supreme Court on Thursday constituted a panel headed by retired judge, Justice AM Sapre, to examine alleged violation of market laws by Adani Group and other listed companies.

The apex court expert committee includes former SBI chairman OP Bhatt, Justice JP Devdatt, veteran banker KV Kamath, Infosys co-founder Nandan Nilekani and advocate Somasekhar Sundaresan.

The panel will provide an overall assessment of the situation including the relevant causal factors which have led to the volatility in the securities market in the recent past. The committee will investigate whether there has been a regulatory failure in dealing with the alleged violation of laws pertaining to the securities market.

The expert panel will also suggest measures to strengthen investor awareness and the statutory and regulatory framework.

The committee has been asked to submit its report to the Supreme Court in a sealed cover within two months.

A bench of Chief Justice of India (CJI) DY Chandrachud and Justices PS Narasimha and JB Pardiwala noted that the Securities and Exchange Board of India (SEBI) is already examining the matter. The top court has asked market regulator SEBI to expeditiously conclude its probe in the Adani-Hindenburg matter within two months.

The order comes after several petitions were filed in the apex court over alleged "manipulation" of stock prices in Adani Group companies.

On January 24, U.S. short seller Hindenburg Research accused the Gautam Adani-led conglomerate of "pulling the largest con in corporate history".

The conglomerate, however, called the allegations as "malicious", "baseless" and a "calculated attack on India".

In February, SEBI said it has put in place "a set of well defined, publicly available surveillance measures" to address excessive volatility in specific stocks. "In all specific entity related matters, if any information comes to SEBI’s notice, then, as per extant policies, the same is examined and after due examination, appropriate action is taken," the capital markets regulator had said.

Adani Group's flagship firm Adani Enterprises called off its fully subscribed follow-on public offer (FPO) earlier this year after the 106-page Hindenburg report triggered a selloff in Adani stocks.

State-run insurer, Life Insurance Corporation of India (LIC) owns a 4.23% stake in Adani Enterprises. LIC also holds 9% in Adani Ports and Special Economic Zone (APSEZ), 3.7% in Adani Transmission, 1.3% in Adani Green Energy and 6% in Adani Total Gas.

Meanwhile, shares of Adani Group's listed companies extended gains on Thursday. Shares of Adani Wilmar, Adani Power and Adani Green were locked in their 5% upper circuits.

According to proxy advisory services firm Stakeholders Empowerment Services (SES), the Adani group's debt concept concern may be "overstated" since each business appears to be independently resilient to muster required cash flows to service debt.