Hindenburg - Adani: Appeal in Supreme Court says Registrar refusing to list plea on delay in SEBI probe

An appeal has been filed before the Supreme Court challenging the court registry's refusal to list an application which had sought a status report from the SEBI on the action taken to address allegations of fraud by US short-seller Hindenburg Research against the Adani group of companies..The appeal filed by advocate Vishal Tiwari said that in a January 3 order, the Supreme Court had given the Securities and Exchange Board of India (SEBI) three months to complete its probe. In that order, the Supreme Court had declined to interfere or order further action on allegations of stock manipulation levelled by Hindenburg against the Adani group.In its judgment, the top court had said that it could not go by newspaper reports on the controversy or supplant its views for that of experts, while leaving it to the SEBI to decide if any further action was required in the matter.The present plea of Tiwari states that the Court's decision to say that this probe should "preferably" be completed within this timeline does not mean that the top court did not fix a deadline.Since this "deadline" had elapsed, Tiwari (who was one of the petitioners in the earlier case in which the January 3 order was passed) had sought to file a fresh application before the Supreme Court.The application had sought the following:The submission of SEBI's investigation report in the Adani-Hindenburg matter, as directed by the Supreme Court on June 3. The submission of a status report by the Central government as well as the SEBI on whether it has considered the suggestions of the Court-constituted Expert Committee to improve the strength of the Indian securities market.The Central government and the SEBI should file a detailed report on the share market crash and loss of investors after the Lok Sabha 2024 results..However, on August 5, the Court's Registrar declined to register the application stating that it was "thoroughly misconceived" and does not disclose any reasonable cause. The Registrar reasoned that the Court has not laid down any deadline for SEBI's investigation, contrary to Tiwari's stance. "The Hon'ble Court did not give any directions either to the Union Government or the DEBI to submit status teport or conclusive report to this Hon'ble Court. In the absence of any such categorical direction to the Union Government and SEBI to submit the report(s), this application for direction for compliance... is wholly misconceived," the August 5 order stated. Tiwari has challenged this move in his appeal."On the grounds of no reasonable cause for registration, which has suspended the Fundamental Right of the petitioner and has closed the door of the Hon’ble Court for the petitioner forever," the plea states.Tiwari has added that it is important for the public and investors who experienced losses after the publication of the 2023 Hindenburg report against the Adani group to know what the SEBI investigation's conclusions are..Notably, controversy broke over the weekend when US-based shortseller Hindenburg Research doubled down on its earlier allegations of stock manipulation against the Adani group.In a new report released on August 10, Hindeburg also alleged that the SEBI chairperson Madhabi Puri Buch may have conflicts of interest in the matter.The report said that a possible reason for the apparent lack of interest shown by the SEBI in investigating allegations of fraud against Adani may be because Buch and her husband Dhaval Buch had stakes in offshore companies with links to Adani companies.These allegations have also been highlighted in Tiwari's latest plea. "The (August 10) report comes a year and a half after its damaging report on the Adani Group that had far-reaching consequences, including the cancellation of the company's flagship Rs 20,000 crore follow-on public offer ... this all has created an Atmosphere of doubt in the minds of public and investors and in such circumstances, it becomes incumbent for SEBI to conclude the pending investigations and declare the conclusion of the investigations," Tiwari has contended.Meanwhile, SEBI responded to the allegations by requesting investors to remain calm before reacting to such reports, assuring that the allegations against Adani have been duly investigated and stating that it remains committed to ensuring the integrity of the Indian capital market. "Chairperson has also recused herself in matters involving potential conflicts of interest," the response said. A statement was also reportedly issued by Madhabi Buch and her husband, refuting the allegations of conflict of interest.