The Supreme Court of India has dismissed the allegations made by US short-seller Hindenburg and the report from the Organised Crime and Corruption Reporting Project (OCCRP) against the Adani Group. The court raised concerns about treating these reports as gospel and questioned the demands for a probe based on them.
Lawyer Prashant Bhushan, who had requested a probe into the allegations and action against the Securities and Exchange Board of India (SEBI) for missing its deadline on the Hindenburg case, faced tough questions from the Supreme Court.
The OCCRP, funded by billionaire George Soros, had accused the Adani Group of insider trading through two foreign investors. The Adani Group dismissed these allegations as recycled and part of a bid by Soros-funded interests, supported by certain sections of the foreign media, to revive the “meritless Hindenburg report.”
SEBI, the capital markets regulator, also dismissed the report as unreliable, coming from a foreign non-profit organization (NGO).
The Solicitor General of India, Tushar Mehta, highlighted that the OCCRP had not shared details of its report with the government and instead directed them to an NGO linked to Bhushan, which he considered a conflict of interest.
Prashant Bhushan defended his charge against SEBI by mentioning a letter from the Directorate of Revenue Intelligence (DRI) in 2014 that alleged over-invoicing by the Adani Group. However, the government lawyer pointed out that the DRI had completed its probe in 2017 and found no irregularities.
The Supreme Court cautioned Bhushan to be careful and not make random allegations. They also questioned Bhushan’s concerns about the committee of domain experts appointed by the court to examine India’s regulatory mechanism, clarifying that the members were chosen by the court, not SEBI.
Regarding SEBI’s inaction on reports by the OCCRP and foreign media, the Supreme Court emphasized that SEBI must rely on evidence of evidentiary value and cannot solely rely on newspaper stories.
The court also highlighted concerns about stories being planted outside India to influence policies in the country.
The Supreme Court clarified that the Hindenburg report cannot be considered the true state of affairs, which is why SEBI was asked to investigate. They emphasized that a publication’s work should not be treated as the gospel of truth.
In May, the Supreme Court-appointed committee gave a clean chit to the Adani Group and stated that there was no regulatory failure on SEBI’s part. The committee also found no evidence of price manipulation by the Adani Group and acknowledged the steps taken by the conglomerate to reassure retail investors during the market turmoil following the publication of the Hindenburg report.
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