Hindenburg Report: SC Constitutes Committee to Probe Matter and Submit Report in 2 Months

NEW DELHI: While hearing a batch of petitions pertaining to the Hindenburg report, the Supreme Court Thursday set up an expert committee headed by retired Justice A M Sapre to look into the issue.

“We hereby constitute an expert committee: consisting of Mr O P Bhat, Justice Devdhar, Mr K V Kamath, and Nandan Nilekani and the committee will be headed by former Judge Abhay Manohar Sapre,” Chief Justice of India D Y Chandrachud said.

The committee is instructed to submit the report in a sealed cover before this court within 2 months. The SEBI shall also inform the expert committee the action it has taken in furtherance of the directions as well as the steps taken as part of the ongoing investigation.

It should be noted that SEBI is already investigating into the allegations of the Hindenburg report as well as the market activity immediately preceding and post the publication of the report to identify violations.

The bench ordered that SEBI shall also investigate :

(a) Whether there is a violation of Rule 19(a) of the Securities Contract Regulation Rules;

(b) Whether there is a failure to disclose transactions with related parties and other relevant information which concerns related parties to the SEBI in accordance with law;

(c) Whether there was any manipulation of stock prices in contravention of existing laws.

“The above directions shall not be construed to limit the contours of the ongoing investigation. SEBI shall expeditiously conclude its investigation within two months and file a status report”, the bench ordered.

On January 24, US-based Hindenburg published its report accusing Adani group of widespread manipulations and malpractices to inflate its stock prices. Adani Group refuted the allegations by publishing a 413-page reply and even went to the extent of terming it as attack against India. Hindenburg shot back with a rejoinder, saying that ‘fraud cannot be obfuscated by nationalism’ and stood by its report.

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