The Supreme Court of India on Thursday, 2 March:
Directed the Securities and Exchange Board of India (SEBI) to finish its probe and file a status report pertaining to the Adani-Hindenburg issue within two months
Set up an expert committee, headed by retired Supreme Court Justice AM Sapre, to review the regulatory mechanism, in light of the issue
A bench comprising Chief Justice of India DY Chandrachud, Justice PS Narasimha, and JB Pardiwala gave the directions.
The Tasks Before SEBI
Taking note of SEBI’s submission that the probe into the allegations made in the Hindenburg report and into the market activity was already underway, the apex court asked SEBI to also investigate:
If there has been a violation of Rule 19A (related to maintenance of minimum public shareholding) of the Securities Contract Regulation Rules
If there has been a failure to disclose transactions with related parties and other relevant information which concerns related parties
If there was any illegal manipulation of stock prices
The Tasks Before Expert Committee
The tasks before the Supreme Court-appointed expert committee includes:
Give an overall assessment of the situation, which includes relevant casual factors that have influenced the recent volatility in the securities market
Suggest measures to improve investor awareness
Probe whether there was a regulatory framework for dealing with alleged violations of law (with regard to the securities market)
Suggest measures to fortify the statutory and regulatory frameworks
Who Is Part of Expert Panel?
Justice Abhay Manohar Sapre, a former Supreme Court judge, is slated to head the panel. Justice Sapre retired from the bench in 2019.
The other members of the panel are:
OP Bhatt: Independent director of the Tata Consultancy Services, Independent director on the boards of a variety of multinationals, and former chairman of State Bank of India (SBI)
Justice JP Devadhar: Retired Bombay High Court judge and former presiding officer of the Securities Appellate Tribunal
KV Kamat: Former chief of the New Development Bank of BRICS countries, as well as former chairman of Infosys Limited
Nandan Nilekani: Co-founder and chairman of Infosys Technologies Limited
Somasekhar Sundaresan: An advocate specialising in commercial law. On 18 January, the Supreme Cour collegium reiterated its recommendation for his elevation as a Judge of the Bombay High Court. Read more about Sundaresan here.
(With inputs from LiveLaw and Bar and Bench.)