Review plea filed against SC verdict on Adani-Hindenburg row

A plea has been filed in the Supreme Court seeking review of its January 3 verdict by which it refused to transfer the probe into allegations of stock price manipulation by the Adani Group to a special investigation team or the Central Bureau of Investigation.

In a significant win for the Adani Group, the apex court had declined to order a CBI or SIT probe and said in its judgement that market regulator Securities and Exchange Board of India was conducting a "comprehensive investigation" into the allegations and its conduct "inspires confidence".

The petition claimed there were "mistakes and errors" in the judgment, and in light of certain new material that have been received by the counsel for the petitioner, there were sufficient reasons for a review of the verdict.

The review petition has been filed by Anamika Jaiswal, who was one of the petitioners in the case.

The plea, filed through advocate Neha Rathi, said the Securities and Exchange Board of India had in its report only updated the court about the status of the 24 investigations it undertook following the allegations, whether they were complete or incomplete, but did not disclose any findings or details of action taken.

"It cannot be concluded that there has been no regulatory failure unless the findings of the SEBI investigations are publicly reported," it said.

In its verdict, the apex court had noted SEBI has completed its investigation in 22 out of the 24 matters where allegations had been levelled against the Adani Group.

"There are apparent errors on the face of the impugned order dated January 3, 2024 wherein this court rejected the petitioners prayer to constitute a court monitored SIT into the massive fraud involving market manipulation through offshore entities owned by promoters of Adani Group. Hence, the impugned judgment is liable to be reviewed," the plea said.

Referring to the SC judgement which said there was no apparent regulatory failure attributable to SEBI, the petition contended, "Whereas, there are many instances through which SEBI's regulatory failures are readily apparent. Such failures have eventually contributed to alleged regulatory contraventions and statutory violations."

The petition said the apex court failed to appreciate that while the issue of over-invoicing may have not been proved, the aspect of Adani Group promoters investing in Adani Group stocks in the Indian stock market has never been investigated. "It calls for a thorough probe," it said.

The apex court had delivered its verdict on a batch of petitions on the Adani-Hindenburg Research row over allegations of stock price manipulation by the Indian business conglomerate.

The Adani Group stocks suffered a bloodbath on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against it.

The Adani Group dismissed the charges as lies, asserting it complies with all laws and disclosure requirements.

Holding that the power of the court to enter the regulatory domain of SEBI in framing delegated legislation was limited, the apex court had in its January 3 verdict directed the market regulator to complete the two pending investigations expeditiously, preferably within three months.

It had said reliance placed by the petitioners on newspaper articles or reports by third-party organisations like Organised Crime and Corruption Reporting Project (OCCRP) to question a comprehensive investigation by a specialised regulator does not inspire confidence.

In its 46-page judgement, the apex court had said, "The facts of this case do not warrant a transfer of investigation from SEBI. In an appropriate case, this court does have the power to transfer an investigation being carried out by the authorized agency to an SIT or CBI."

"Such a power is exercised in extraordinary circumstances when the competent authority portrays a glaring, wilful and deliberate inaction in carrying out the investigation. The threshold for the transfer of investigation has not been demonstrated to exist," it had said.

The judgment was delivered on PILs filed by lawyers Vishal Tiwari, M L Sharma, Congress leader Jaya Thakur, and Anamika Jaiswal.