Adani-Hindenburg: SC Asks Registry to Make Copies of Expert Committee’s Report Available to Parties

The three-judge bench granted Securities and Exchange Board of India (SEBI) an extension of time till August 14 to submit its report, even as the matter will be listed next on July 11.

New Delhi: The Supreme Court bench of Chief Justice of India D.Y. Chandrachud and Justices P.S. Narasimha and J.B. Pardiwala on Wednesday, May 17, took note of the submission of the report by the six-member expert committee, constituted by it in March, bearing in mind the timeline of two months stipulated in its order.

In its order issued on May 17, the bench directed the Supreme Court Registry to make copies of the report available to the parties and their counsel to enable them to assist the Court in the course of further deliberations. “The Registry shall take up steps accordingly,” the order reads.

The March 2 order only directed the committee to submit its report in a “sealed cover”. As the CJI is, in principle, opposed to “sealed cover jurisprudence”, it is expected that the order does not bind the parties not to make it public.

The May 17 order does not specifically say that the report will continue to be under wraps. It only refers to the need for the court and the counsel to analyse the report and reflect on the suggestions which have been made by the Expert Committee, before the proceedings are listed after the summer recess on July 11.

The May 17 order requests the Expert Committee to continue to assist the court, and hold further deliberations in the meantime. “The Committee would be requested to take up any further aspects or suggestions as may be formulated by the Court, following the course of deliberations when the proceedings are next listed for hearing,” the order notes.

The order grants Securities and Exchange Board of India (SEBI) an extension of time till August 14 to submit its report.  The order also directs SEBI to place on the record an updated status report in regard to the course of the investigation.

Proceedings on May 17

Earlier, Livelaw reported that the SEBI has filed a second affidavit before the Supreme Court clarifying that the statement of the Minister of State for Finance Pankaj Chaudhary, in his 2021 reply in Parliament, had no connection with its 2016 probe.  The 2016 probe was over Global Depository Receipts (GDR) issue against 51 Indian listed companies, of which the Adani group was not a part, Livelaw reported.

As per SEBI, the investigation referred to in the reply by the minister was in respect of non-compliance with Minimum Public Shareholding (MPS) norms and consequential violations. This investigation, SEBI told the Supreme Court, had commenced in October 2020 and not 2016.

On May 15, in its first affidavit, SEBI explained reasons for seeking extension of six months to complete its probe on the Hindenburg report’s allegations against Adani group companies.  In that affidavit, SEBI had denied the allegation made by petitioner Vishal Tiwari and his counsel, Prashant Bhushan that it had been investigating Adani group companies since 2016, to oppose SEBI’s plea for more time.

Social media comments pointed out, however, that Chaudhary told Member of Parliament Mahua Moitra in 2021 that SEBI was investigating some Adani group companies with regard to compliance with its regulations. Many social media users, therefore, questioned SEBI’s stand that it had not been probing Adani since 2016, based on the minister’s reply in Parliament.

Prashant Bhushan informed the court on May 17 that the SEBI had missed out the fact that the three investment companies – Albula Investment Ltd, Cresta Funds Ltd, and APMS Investment Fund Ltd – had been investing all their money in Adani.

Solicitor General Tushar Mehta, however, refuted Bhushan’s claim by saying that the minister’s statement in parliament was with regard to investigation in respect of possible non-compliance with MPS norms and its consequential violations.  These investigations, he claimed, took place in 2020, and not in 2016. He reiterated that no listed company of the Adani group was part of the list of 51 companies, sought to be probed by SEBI, in 2016.