Supreme Court Clears Adani Group in Hindenburg Case: No SIT Probe, SEBI Investigation Upheld

New Delhi: In a significant win for the Adani Group, the Supreme Court of India on Wednesday dismissed petitions seeking a separate investigation into allegations raised by US short-seller Hindenburg Research. The Court upheld the Securities and Exchange Board of India's (SEBI) ongoing investigation and declined to set up a special investigation team (SIT).

Delivering the judgment, Chief Justice of India D.Y. Chandrachud, along with Justices J.B. Pardiwala and Manoj Misra, stated that reliance on the report by the Organized Crime and Corruption Reporting Project (OCCRP), allegedly funded by billionaire George Soros, could not be used to question SEBI's investigation.

Key Points of the Judgment:

• SEBI investigation prevails: The Court affirmed that SEBI has already investigated 22 out of 24 cases related to Hindenburg's allegations and provided SEBI three months to finalize the remaining two.
• SIT probe rejected: The Supreme Court found no valid grounds to transfer the inquiry to an SIT, reiterating that such transfer should only occur in exceptional circumstances with strong justification.
• OCCRP report deemed insufficient: The Court dismissed reliance on the OCCRP report for questioning SEBI's investigation, emphasizing the need for verified evidence over hearsay.
• Government and SEBI tasked with scrutinizing Hindenburg: The Court instructed both entities to probe whether Hindenburg violated any short-selling regulations and take necessary action.
• Focus on strengthening investor protection: The judgment highlighted the need for stronger investor protection and directed the government and SEBI to implement recommendations submitted by a committee appointed by the Court.

Implications:

This judgment signifies a major legal victory for the Adani Group, clearing their name against accusations leveled by Hindenburg. It underscores the continued trust in SEBI as the primary investigator in such matters. Additionally, the Court's directive to examine potential regulatory breaches by Hindenburg adds a new dimension to the case.

Overall, the Supreme Court's decision offers clarity and finality to the Hindenburg controversy, paving the way for the Adani Group to focus on its future endeavors. However, the Court's emphasis on investor protection and regulatory strengthening emphasizes the need for robust mechanisms to safeguard fair market practices in India.