One More PIL Filed in SC on Adani-Hindenburg Row

A fresh PIL was filed on Thursday in the Supreme Court seeking a probe by multiple central government agencies under the supervision of a panel or a former apex court judge against the Adani Group of companies following allegations of fraud and share price manipulation made by the US-based Hindenburg Research.

A bench headed by Chief Justice D Y Chandrachud is already seized of as many as three PILs alleging exploitation of innocent investors and “artificial crashing” of the Adani Group’s stock value, and they are listed for hearing on Friday.

On Monday, the Centre had agreed to the apex court’s proposal to set up a panel of experts to look into strengthening the regulatory mechanisms for the stock market following the recent Adani group shares meltdown triggered by Hindenburg Research’s fraud allegations.

Stock market regulator Securities and Exchange Board of India (SEBI), in its note filed in the top court, had indicated it is not in favour of banning short-selling or sale of borrowed shares, and said it is investigating allegations made by a tiny short-seller against the Adani Group as well as its share price movements.

The fourth PIL has been filed by Mukesh Kumar, who claims to be a social worker, through lawyers Roopesh Singh Bhadauria and Mareesh Pravir Sahay.

Lawyer Bhadauria also heads the legal cell of the Indian Youth Congress (IYC).

“Direct appropriate audit (transactional and forensic audits), inquiry and investigation by appropriate agencies such as Serious Frauds Investigation Office (SFIO); Registrar of Companies (RoC); Securities and Exchange Board of India (SEBI); ED (Directorate of Enforcement) on money-laundering aspect; I-T (Income-Tax Department on aspects of offshore transactions and tax-havens involved and DRI( Department of Revenue Intelligence),” the plea said.

Besides seeking a direction to the Centre and its agencies to render cooperation in the probe, the PIL has sought a direction to appoint a retired judge of the apex court “or a committee to oversee and monitor the inquiry and investigation”.

“The petition filed purely and solely in public interest involves grave issues and questions of law pertaining to gross corporate malpractices including in the stock markets which directly / indirectly affects crores of innocent investors besides having a larger effect on the country’s economy as a whole. This affects the fundamental rights of crores of innocent small-scale investors and citizens across the country,” it said.

It said various aspects of “corporate mis-governance” have come to light including the roles of concerned agencies and authorities such as DRI and SEBI.

“Leading PSU Bank, State Bank of India and leading PSU Life Insurance provider LIC have huge exposures. State Bank of India’s (SBI) exposure to Adani Group companies is close to Rs 27,000 crores while LIC has invested more than US $4 billion in the conglomerate. It is well-known that crores of medium and small scale investors have put in their life-savings in SBI and in LIC policies and such serious exposure cannot be brushed away with simple statements,” it said.

The petition has also sought a direction to the unified payments interface (UPI) to ensure protection of innocent small-scale investors who have put in their life-savings in SBI, LIC and in the stock markets in general.

Adani Group stocks have taken a beating on the bourses after the Hindenburg Research made a litany of allegations, including those of fraudulent transactions and share price manipulation, against the business conglomerate.

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

The top court had last week said the interests of Indian investors need to be protected against market volatility in the backdrop of the Adani stocks rout and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look at strengthening the regulatory mechanisms.

Earlier PILs were filed by lawyers M L Sharma, Vishal Tiwari and Congress leader Jaya Thakur.

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