Adani-Hindenburg Row: SC Orders 6-member Probe Panel Headed by Retired Judge Sapre

· Report to be Submitted in 2 Months

The Supreme Court on Thursday ordered the setting up of a committee headed by ex-SC judge AM Sapre, including KV Kamath and Nandan Nilekani to probe the recent Adani Group shares crash triggered by the Hindenburg Research's fraud allegations.

The SC has asked market regulator SEBI to conclude its investigation within two months. It has also asked the SEBI to investigate whether there has been a violation of Section 19 of SEBI rules, and whether there was any manipulation of stock prices.

The expert panel will include former judge AM Sapre, KV Kamath, Nandan Nilekani, Somasekhar Sundaresan, OP Bhat and retired Justice JP Devadhar.

The SC further said that the remit of the committee will be to suggest measures to strengthen frameworks, to investigate Adani row and to suggest measures to strengthen the statutory framework.

The SC has directed SEBI to ensure that all information is provided to the committee and that the report should be submitted in a sealed cover before this court in two months.

While reserving its order on February 17, the top court had refused to accept in a sealed cover the Centre's suggestion on a proposed panel of experts. Observing that it wanted full transparency for protection of investors, the top court had also ruled out the possibility of any sitting judge overseeing the functioning of the proposed panel.

SEBI, in its note filed in the top court, had indicated it is not in favour of banning short-selling or sale of borrowed shares, and said it is investigating allegations made by a tiny short-seller against the Adani Group as well as its share price movements.

Tiwari, in his PIL, sought a direction to the Centre to constitute a committee monitored by a retired apex court judge to inquire into the Hindenburg Research report which has made a slew of allegations against the business conglomerate led by industrialist Gautam Adani.

Another PIL filed by advocate M L Sharma sought prosecution of short-seller Nathan Anderson of the US-based Hindenburg Research and his associates in India and the US for allegedly exploiting innocent investors and the "artificial crashing" of the Adani Group's stock value in the market.

Congress leader Thakur, in his plea, has sought an investigation under the supervision of a sitting apex court judge against the Adani Group of companies in light of the allegations.

The fourth PIL seeks a probe by multiple central government agencies under the supervision of a panel or a former apex court judge against the Adani Group following allegations of fraud and share price manipulation.

"Direct appropriate audit (transactional and forensic audits), inquiry and investigation by appropriate agencies such as Serious Frauds Investigation Office (SFIO); Registrar of Companies (RoC); Securities and Exchange Board of India(SEBI); ED (Directorate of Enforcement) on money-laundering aspect; I-T (Income-Tax Department on aspects of offshore transactions and tax-havens involved and DRI( Department of Revenue Intelligence), " PTI quoted the fourth plea assaying.

Besides seeking a direction to the Centre and its agencies to render cooperation in the probe, the PIL has sought a direction to appoint a retired judge of the apex court or a committee to oversee and monitor the inquiry and investigation.

Seven listed Adani group companies have lost more than half their market capitalisation, which shrivelled to less than$100 billion, after a report by Hindenburg Research questioned conglomerate's debt levels and use of tax havens.

Adani, whose fortunes had risen rapidly in recent years, also unexpectedly announced the withdrawal of its Rs 20,000-crore follow-on public offer (FPO), which had been successfully completed the day before.

Investor mood was further jolted after the share sale was called off. The Adani Group has rubbished the allegation of stock manipulation, saying it had "no basis" and stemmed from ignorance of Indian law. The company said over the past decade, group companies have "consistently de-levered".

The stock meltdown also marks a dramatic turn of fortune for Adani, who in recent years have forged partnerships with, and attracted investment from, foreign giants. Adani also lost his position as Asia's richest person in Forbes' rankings of the world's wealthiest people.