Adani Hinder Burg Case: What is in supreme court order: Exclusive
The Supreme Court passed its orders on the Adani Hinder Burg case which began with the US short-selling group publishing a report on stock manipulation by Adani firms in January 2023. Later a group of petitions were filed before the court seeking investigation on the allegations. A teenage boy listening to this expresses shock and his father on the other hand reacts to it as the usual news. But Both were bound by curiosity just as any other human beings. The keenness forced them to switch on the Television and sit in front of it at least for an Hour.
The father who sat to listen grasped only major details such as “The report of Hinder burg on the Adani group stock manipulation in January 2023”, “Batch of petitions filed in supreme court requesting an investigation on the issue” and the “supreme court order”. On the other hand, the teenage boy is sweating, he is not able to listen to the news, the source of his frustrations is he has invested his pocket money in Adani stocks now he has no option but to be a mute spectator.
He also could not share this with his father because the Adani Hinder burg case is a death knell for him of course only if his father gets to know about the money. He then in the fear of getting caught in his father’s eye suppresses his emotions which helps him to listen to the news. The issue began when Hinder Burg published a report alleging stock manipulation by Adani firms it also alleged illegal use of tax haven.
The Adani group in response said the report is “unresearched” and “maliciously mischievous”, the report collapsed the stocks of Adani companies it lost 140 billion dollars and it failed to sell the 20,000 crore shares which was part of the company procedures. this was the origin of the Adani Hinder burg case says the reporter, ‘oh my god’ says the teenage boy to himself.
Two months later the Supreme Court set up a panel consisting of six members, led by the retired Supreme Court judge AM Sapre committee was assigned the following tasks. Were there any lapses in regulatory procedures by SEBI(Securities and Exchange Board of India) and did the Adani group break any rules regarding tax or accounting? the court set a deadline for the completion of the Investigation.
In May 2023 the committee said the allegations in the Adani Hinder Burg case cannot be proved at this “stage of Investigation” but it highlighted red flags regarding Foreign Portfolio Investor Regulations (FPI). In the Meantime the court began hearing petitions and the Supreme Court said it is not a procedure to give the task for the SIT (Special Investigation Team) to look into the alleged rules breach of MPS rules without Evidence of regulatory mistake by the SEBI which is under Investigation.
The boy then said loudly what about my money will I get it back or not? without realizing his surroundings. His father questioned him but the boy had no response his father realized the situation and started listening to the order keenly.
Supreme Court order on Adani Hinder Burg case
“The Supreme Court has said the court cannot enter into the administrative regulation”, this was a response to the report by a court-appointed panel that highlighted mistakes in FPI regulations. It also declined to enter into SEBI investigation and refused the request to set up a Special Investigation Team
The court also said the SEBI should Proceed with the investigation as per the rules. It further said reports of third parties don’t necessitate a separate Investigation. It also said that the SEBI and Central Government must follow the suggestions made by the court-appointed panel.
In the order on Adani Hinder Burg case, the court said orders cannot be passed by depending on random sources that carry unverified Information and keeping it as evidence will become counterproductive for the public interest. The Supreme Court has also ordered the SEBI to complete the Investigation of two other cases regarding Adani firms within three months.
After Hearing about the order on Adani Hinder Burg’s case the boy said Whatever it may be, whether the stock price is rising or not, that’s what matters to me. He then says I am shivering to look at the price. His father said in response I will make you shiver for your entire life if the price has decreased.
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1. What Is the major point in the Supreme Court order regarding the Adani Hinder Burg case?
The Supreme Court said that the Hinder burg report or any third-party report cannot be considered as evidence it further stated without having proper evidence it is not right to hand over the case to a special Investigation team when the same is being investigated by the SEBI.
2. What is the deadline given by the top court to complete the investigation of the remaining two cases for the SEBI?
The court has set a deadline of three months for the SEBI to complete the investigation in the remaining two cases related to Adani Firms
3. How did Adani’s stocks react to the order in Adani Hinder Burg case?
The stock price of Adani Ports had risen to 1,144 per share before the order expecting the dismissal of petitions. However, the Supreme Court dismissed petitions and also ordered the SEBI to complete the investigation in the remaining two cases related to Adani firms this pulled the stock price to 1,082.4 as the violations were not ruled out completely.
4. What was the report by Hinder Burg on the Adani group?
The US-based short seller accused the Adani firms of manipulating the stock market and accounting fraud by the Adani group through its report in January 2023