[Adani-SEBI Case] Plea Seeks Probe By Centre And Sebi Into Stock Market Crash Following Election Results: SC

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An application has been filed in the ongoing Adani-Sebi investigation case, urging the Supreme Court to intervene and direct the Union Government and the Securities and Exchange Board of India (Sebi) to submit a comprehensive report regarding the recent share market crash and the subsequent losses suffered by investors following the Lok Sabha 2024 election results

[Stock Market Crash] Plea Seeks Probe by Centre and Sebi: SC

NEW DELHI: An application has been filed in the ongoing Adani-Sebi investigation case, urging the Supreme Court to intervene and direct the Union Government and the Securities and Exchange Board of India (Sebi) to submit a comprehensive report regarding the recent share market crash and the subsequent losses suffered by investors following the Lok Sabha 2024 election results.

The application, put forth by Advocate Vishal Tiwari, the urgency for Sebi to fulfill its mandate and submit the long-awaited investigation report concerning allegations made against the Adani group by US-based short-seller Hindenburg Research.

On January 3, when the Supreme Court declined pleas for a third-party investigation into allegations of accounting fraud and stock manipulation by Hindenburg Research, expressing confidence in Sebi’s ongoing investigation. At that time, the court directed Sebi to conclude its remaining two investigations within three months, emphasizing the need for expeditious closure.

As per Sebi’s status report submitted to the apex court in August, two investigations regarding the Adani Group matter remain unresolved. The first revolves around alleged violations of minimum public shareholding regulations involving overseas entities, with Sebi facing challenges in establishing the economic interests of certain foreign portfolio investors (FPIs).

Sebi has finalized 22 out of the 24 investigations concerning the Adani group. The delay in concluding the remaining two investigations is attributed to the necessary information awaited from foreign regulators. The Solicitor General, representing Sebi, has assured that these investigations will be expedited and brought to a timely conclusion. Recognizing the importance of closure and avoiding prolonged uncertainty, Sebi is mandated to complete these pending investigations preferably within three months.

The second investigation pertains to examining trading activities before and after the release of the Hindenburg Report, focusing on the unusual short positions held by specific entities in the Adani Group.

The recent application filed by Advocate Vishal Tiwari highlights concerns regarding the regulatory mechanism of the stock exchange, particularly in light of the substantial losses incurred by investors following the Lok Sabha 2024 election results.

The application raises questions about potential market manipulations and the effectiveness of regulatory oversight, echoing similar apprehensions stemming from the share market crash of 2023.

Tiwari’s plea states the Supreme Court to direct both the Government and Sebi to submit a detailed report elucidating the factors contributing to the share market volatility and investor losses post the Lok Sabha 2024 polls. The application emphasized the need for transparency and accountability in addressing market irregularities and restoring investor confidence.