The Supreme Court has dismissed a petition seeking a review of its January 3 verdict that refused to order a separate investigation into the allegations of accounting fraud and stock manipulation against Adani Group companies, as originally claimed in a report by US short-seller Hindenburg Research in January 2023.
The review petition, filed by Anamika Jaiswal, was rejected by a three-judge bench led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, which included Justices JB Pardiwala and Manoj Misra. “Having perused the review petition, there is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules 2013. The review petition is, therefore, dismissed,” stated the bench. The decision was made on May 8 but was publicly disclosed on Monday.
Jaiswal’s petition argued that the Supreme Court’s earlier judgment overlooked regulatory failures by the Securities and Exchange Board of India (Sebi) and contained errors apparent on the face of the record. She criticized the court for endorsing Sebi’s investigation without disclosing the findings or details of actions taken, asserting that Sebi’s status report only indicated the completion status of the 24 investigations without substantive details.
The petition further highlighted legislative amendments made by Sebi in 2018 and 2019, which adjusted the Foreign Portfolio Investors (FPI) regulations, alleging that these changes diluted the requirements for disclosing beneficial owners and allowed for more opaque structures. Jaiswal contended that the apex court failed to notice the impact of these amendments.
In its January verdict, the Supreme Court concluded that there was no substantial evidence to show “glaring, willful, or deliberate inaction” by Sebi in its investigation. The court dismissed the reliance on the Hindenburg report and other unsubstantiated news reports as the basis for questioning Sebi’s comprehensive investigation. It rejected pleas for the creation of a special investigation team (SIT) to probe Hindenburg’s allegations, noting that third-party reports cannot be treated as conclusive proof of Sebi’s probe inadequacy.
The judgment recorded that Sebi had completed investigations into 22 out of 24 allegations against the Adani Group and gave the regulator three months to conclude the two pending investigations. It also directed Union government agencies to investigate whether the losses suffered by Indian investors due to the conduct of Hindenburg Research and others involved any legal infractions and to take suitable action if so.
Hindenburg’s report, published in January 2023, accused the Gautam Adani-led group of “brazen accounting fraud” and “stock manipulation.” While the conglomerate rejected the report as “unresearched” and “maliciously mischievous,” it led to a significant stock market rout, with Adani Group stocks losing over $140 billion and the cancellation of a planned ₹20,000 crore share sale.
Several petitions, filed by lawyers and activists, demanded a court-monitored probe into the matter by establishing an SIT under the supervision of a retired judge. Some petitioners also questioned the validity of the 2018 and 2019 amendments in the FPI regulations. However, the Supreme Court ruled that the impugned amendments had actually tightened the norms on the disclosure of beneficial owners under the FPI and LODR (Listing Obligations and Disclosure Requirements) regulations.
Sources By Agencies