Breaking: How Do We Ensure Protection Of Indian Investors- Supreme Court To Consider In Pleas Seeking Investigation Into Hindenburg Report
The Supreme Court today sought instructions from the Centre and the SEBI about the situation caused by the Hindenburg Report in pleas seeking an investigation into the Hindenburg Report on the Adani group of companies. The Court said that it wants to ensure that the resultant loss to Indian investors does not happen again in future.
A Bench of Chief Justice DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala has listed the matter on Monday while clarifying that regulatory authorities like SEBI are seized of the issue.
The Bench said at the outset, "They have brought an issue before the Court. How do we ensure the protection of Indian investors?"
What happened here was a product of short selling. Suppose as a result of a short sale, the value of shares can get depressed depending on the number of shares offered in the market. The purchaser then gets the benefit of the depression. If this is happening on small scale, nobody may bother. They say that the total loss suffered by Indian investors may go in the range of several lakh crores, the Chief Justice said.
"How do we ensure, in future, we have a robust mechanism in place to ensure that the Indian investors are protected? How do we ensure that this does not happen? What role is envisaged for SEBI?", the CJI asked.
Solicitor General Tushar Mehta appeared for SEBI and submitted at the outset that SEBI is seized of the matter.
"It will be premature for me to answer. The trigger point was a report which was from beyond our territorial jurisdiction. We are also concerned about the investors", said Tushar Mehta.
One of the suggestions is that we have something like a financial sector law reforms committee. You can then take a call on whether modification of the regulatory framework is required, the CJI said.
Come back on Monday and tell us about the existing framework. Can we contemplate an expert committee comprising of experts from security, international banking and a former judge as a guiding force? We can also give a vital role to SEBI, the CJI said, adding that this might happen in future again.
We can also have an expert from the securities bar as an Amicus. "We will tread very cautiously", said the CJI indicating that what it says may also have an impact on the stock markets.
The Bench clarified that its observations shall not be a reflection on the discharge of statutory function by SEBI or any other statutory authority.
Advocate Vishal Tiwari, the petitioner-in-person appeared before the Supreme Court along with Advocate Manohar Lal Sharma, the other petitioner-in-person who has filed a similar plea.
In his plea, Sharma has alleged that “short sellers, i.e. Anderson resident of USA and his Indian entities hatched a criminal conspiracy did short sale in hundreds of billion dollars prior and thereafter on 25th January 2023 they released a concocted news as research report qua to the Adani Group of the companies, got crash share market and squared up their short sell position at the lowest rate. They secured billions of profits by butchering citizen of India”.
The plea seeks inquiry to prosecute by registering F.I.R. against Anderson and his associates.
In his PIL, petitioner-Vishal Tiwari has also sought directions to set up a Committee under the Chairmanship of a retired Supreme Court Judge to investigate and form a special committee for sanction of high-power loans. The plea states that after the publication of the Hindenburg Report, various investors have lost massive amounts who invested their savings in such shares.
Thus the petitioner has sought directions for forming a Committee under the monitoring of the retired Supreme Court Judge to enquire into the Hindenburg Research Report. The petitioner has also prayed to set up a special committee for overseeing sanction policy for high-power loans of more than 500 crores that are given to big corporates.
Cause Title- Vishal Tiwari v. Union of India & Ors.