The Supreme Court refused to interfere in the ongoing investigation by SEBI
Pro. Neelam Mahajan Singh
Each government has their favorite industrialists. The ‘Birla family’ had economically gained during the Congress period. Former Prime Minister Rajiv Gandhi had rejected Dhirubhai Ambani’s proposals. Traders became scared during P.M. V.P. Singh’s government. ‘VAT’ and ‘GST’ became a headache for businessmen. Nowadays, there is a lot of talk about industrialist Gautam Adani’s, expansion of business empire in Narendra Modi’s government. Last week, I saw an hour long interview of Gautam Adani with Rajat Sharma, in his programme, ‘Aap Ki Adalat’. In this programme Adani was asked questions that would give him an opportunity to explain his point of view.
Now Gautam Adani appears to be out of danger! The entire media has been taken-over by the Adani Group. Most of the journalists are now his employees. Several businessmen are nominated to Rajya Sabha by political parties, on financial considerations. Last week, the Supreme Court of India gave its verdict on the ‘Adani-Hindenburg case’. The Supreme Court refused to interfere in the ongoing investigation by SEBI. The bench of three judges, comprising of Chief Justice Dr. D. Y. Chandrachud, Justice J. B. Pardiwala and Justice Manoj Mishra have given their decision.
“SEBI’s investigation is considerably appropriate and it is the competent agency to investigate matters related to economic discrepancies, if any, by the business houses”, the court unanimously observed. The market regulator SEBI has completed the investigation of 22 out of 24 cases in the Adani-Hindenburg report and investigation of 2 more cases is still pending. The Supreme Court has directed SEBI to complete the investigation in the remaining two cases within three months, which is now ‘timebound’. While hearing this case in November 2023, the court had reserved its decision by rejecting the questions being raised on the market regulator, SEBI’s investigation and the experts’ committee.
It is noteworthy that the ‘American short seller firm’ had published a research report on Adani Group, in which serious questions were raised about the debts Adani Group from consortium of banks, including ‘shares of Adani companies being overvalued’ and manipulation in prices. Regarding the formation of SEBI’s SIT, the Supreme Court said, “We are ordering SEBI to submit its complete investigation report within the given time”. While delivering the judgement, CJI Justice Chandrachud said, “The court has limited powers to interfere in the jurisdiction of SEBI. SEBI itself will investigate the matter.
The investigation of the SIT will not be transferred as there is no visible justification for the same.” So well, now after the Adani Group shares crash, the shares increased rapidly in the market, reaching on top, while writing this article. Earlier I didn’t understand much on market economy, but now I do! Several years ago, while I was in London, I saw a signboard where it was written, ‘Adani Power’. When I asked as to which group was it, I was told that this group was ‘growing very fast’. It isn’t as if any industrialist starts surging forward in a few days. Dhirubhai Ambani had created such a huge empire; but starting from zero. Ambani and Adani have come face to face many times, on several deals. What really happened that the shares of Adani companies started moving upwards like a rocket? The Supreme Court of India, refused to strike down SEBI’s FPI rules, saying courts cannot enter into the domain of regulatory governance. “There is no basis for transferring the investigation. This can only be raised if rules have been violated”, observed the Court.
The court rejected the reliance on the OCCPR report, saying, “a report of a ‘third party organization’ without any verification cannot be relied upon as evidence”. Justice Dhananjay Yashwant Chandrachud said, “The government and SEBI will consider the recommendations of the committee to strengthen the interests of Indian investors and will also look into the fact, whether there is any compliance within the law written in the ‘Hindenburg Report on Short Selling? Has there been any violation or not, action will be taken as per law.” There were already indications that the Supreme Court’s decision would be in favor of Gautam Adani and now the court has said it in clear words that there’s no reason in transferring the investigation to CBI. The Supreme Court had said that the Hindenburg Report cannot be considered the sacred truth. Even before the decision of the Supreme Court, there was a stormy rise in the shares of all the companies of Adani Group, listed in the stock market With the start of trading in the stock.
Adani Energy Solutions shares jumped 14.29% to Rs 1214. Shares of Adani Total Gas registered a rise of 10 percent, Adani Green Energy rose by 8 percent, while Adani Group’s flagship company Adani Enterprises rose by 7 percent. Adani Walmart shares rose 7.49 percent. Adani Ports rose by more than 5 percent. Shares of Gautam Adani’s cement companies are trading in the green sign! Ambuja Cement stock is trading with a gain of 2.48 percent. Senior advocate and former Attorney General, Mukul Rohatgi, has sought criminal action against Hindenburg, after Supreme Court’s decision. Senior advocate, Harish Salve, who represented India in several international cases said, “Supreme Court of India’s verdict is more than just an affirmation for the Adani Group.
It restates the importance of the rule of law and separation of powers. This decision on separation of powers will help a flourishing democracy in the long run”. In retrospect, it would not be an exaggeration to say that the contribution of private industrialists is necessary to improve any country’s economy. Privatization of many sectors controlled by the state is not appropriate, but this decision will have to be thoughtfully taken by the Narendra Modi government. Even in Delhi, electricity has been given to Ambani and Tata Group. Air India is given to the Tata Group. Outsourcing everything may not be right. These two important principles cannot be ignored. To keep democracy alive, ‘Antyodaya’ will have to be implemented. It is the common man in the end of the que, who should gain from economic growth.
It’s true that Gautam Adani has known PM Narendra Modi for several years and they have friendly relations. Politicization of economic empowerment is unfair. Public interest, human development, youth’s, women’s empowerment and economic self-reliance are important for India. In that sense, any industrialist, if he operates according to the rules, is right. Gautam Adani is very hardworking and aware of the fact that many people are keeping a hawk’s eye on him. Right now the ‘bull is speeding upwards in trading’. The Indian economy is confronted with many issues. The financial strengthening of a nation with economic prosperity would be beneficial for the people of India.
(Sr. Journalist, Author, Doordarshan Personality, Solicitor for Human Rights Protection and Philanthropist)