Demand to form a new committee to investigate Adani-Hindenberg case

A new petition has been filed in the Supreme Court on Monday in the Adani-Hindenburg case. In the petition, a request has been made to constitute a new expert committee. Petitioner Anamika Jaiswal has filed this petition through her lawyer Ramesh Kumar Mishra.

It has been said in the petition that such persons should be included in the committee, whose image is spotless and who have nothing to do with the Adani-Hindenberg case in any way. Experts related to finance, law and stock market should also be included in the committee. The Supreme Court can hear the petition on October 13.

On January 24, 2023, American short-seller company Hindenburg Research had leveled allegations against Adani Group ranging from money laundering to share manipulation. The Supreme Court had formed a 6-member committee to investigate this matter.

The head of the six-member committee was MM Sapre.
The head of the committee was retired judge AM Sapre. Along with him, Justices JP Deodhar, OP Bhat, MV Kamath, Nandan Nilekani and Somashekhar Sundaresan were also included in the committee. The committee had made its investigation report public on 19 May 2023.

Points of the expert committee report...

• The committee said in the report- SEBI suspects that 13 foreign funds investing in Adani Group may have links with the promoters.
• No pattern of wash trade has been found in Adani Group shares. Wash trade means buying and selling shares yourself to increase volume.
• Some institutions had taken short positions before the Hindenburg Report was published. When the share price fell, he bought it and made a profit.
• Questions on OP Bhat, KV Kamath and Somashekhar Sundaresan
• In the new petition, questions have been raised on the involvement of expert committee members and former State Bank of India chairman OP Bhatt, KV Kamath and Somashekhar Sundaresan. It has been said in the petition that there is a conflict of interest due to the joining of these members in the committee.

OP Bhat is the chairman of Greenco, a renewable energy limited company. Greenco and Adani Group are in close partnership from March 2022 to provide energy.
KV Kamath is also named in the CBI FIR in the fraud case related to ICICI Bank MD Chanda Kochhar. KV Kamath was the chairman of ICICI Bank from 1996 to 2009.

What has happened so far in this matter after the Hindenburg report:

1. First filed four PILs

• In the petition, Manohar Lal Sharma had demanded investigation and FIR against Hindenburg Research founder Nathan Anderson and his associates in India. Along with this, a demand was also made to ban media coverage on this matter.
• Vishal Tiwari had demanded an investigation into the Hindenburg Report by forming a committee headed by a retired SC judge. In his petition, Tiwari had talked about the situations people face when share prices fall.
• Jaya Thakur had raised doubts on the role of Life Insurance Corporation of India (LIC) and State Bank of India (SBI) in this matter. He had demanded an investigation into the role of LIC and SBI in investing huge amounts of public money in Adani Enterprises.
• In his petition, Mukesh Kumar had sought instructions from SEBI, ED, Income Tax Department, Directorate of Revenue Intelligence for investigation. Mukesh Kumar had filed this petition through his lawyers Rupesh Singh Bhadauria and Mahesh Praveer Sahay.

2. Court formed 6-member committee on March 2, 2023
The Supreme Court made retired judge AM Sapre the head of the 6-member committee. Along with him, Justices JP Deodhar, OP Bhat, MV Kamath, Nandan Nilekani and Somashekhar Sundaresan were included in this committee. The bench of Chief Justice DY Chandrachud, Justice PS Narasimha and JB Pardiwala had given this order to form the committee on March 2.

3. SEBI asked to investigate these 2 aspects
Was there a violation of Rule 19(A) of the Securities Contract Regulation Rules?
Was there any manipulation of stock prices in violation of existing laws?
Rule 19 (A) is related to minimum public share holding.
Rule 19 (A) of the Contract Regulation Rules is related to minimum public shareholding of companies listed in the stock market. According to Indian law, at least 25% shareholding in any listed company should be of public i.e. non-insiders.

Hindenburg Research report alleged that Gautam Adani's brother Vinod Adani manages shell companies abroad. Through these, billions of dollars were transferred to listed and private companies of Adani Group in India. This helped Adani Group to avoid laws.

4. SEBI got additional time from Supreme Court for investigation
The Supreme Court had given time till August 14 to SEBI to submit its investigation report. Earlier on March 2, the court had given SEBI two months time for investigation. That means he had to submit his report by May 2. However, SEBI had said that the transactions of Adani Group are quite complex, hence it needs at least 6 months time for investigation.