Supreme Court declines plea to transfer the Adani probe to a SIT, upholds SEBI's role; “Satyameva Jayate,” says Gautam Adani

The Supreme Court on Wednesday declined the plea to transfer the investigation into the Adani-Hindenburg issue that involves allegations of stock price manipulation by the Adani group, from the Securities and Exchange Board of India (SEBI) to a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI).

The Chief Justice of India DY Chandrachud, along with Justices PS Pardiwala and Manoj Misra, the highlighted the limited scope of the apex court's power to intervene in the SEBI's regulatory domain. The court clarified that its role in judicial review is primarily to assess whether any fundamental rights have been violated. The Supreme Court expressed confidence in the probe conducted by SEBI's, stating there was no evidence to doubt its proceedings and findings.

The Supreme Court's decision came in response to a batch of petitions seeking a court-monitored or CBI investigation into allegations made by the US-based Hindenburg Research against the Adani group for purportedly violating stock market regulations. The bench clarified that there was no regulatory lapse on the part of SEBI and emphasized that the market regulator cannot be expected to solely rely on media reports, even though such reports may serve as inputs for SEBI.

The top court directed SEBI to conclude its investigation into two out of the 24 pending cases within three months. The case revolves around accusations, as outlined in a report by the Hindenburg Research, claiming that the Adani group had manipulated the price of its shares.

Following the publication of the report, the share value of several Adani companies is said to have seen a substantial decline, reaching an approximate total of USD 100 billion. The Adani Group has refuted these allegations, labeling them as “lies”, and asserting its adherence to all legal and disclosure obligations.

Multiple petitions were filed, contending that amendments to the Securities and Exchange Board of India Act (SEBI) had created a protective barrier, allowing the Adani Group's regulatory violations and market manipulations to go unnoticed. The Supreme Court subsequently directed SEBI to conduct an autonomous investigation into the issue and established an expert committee led by retired Supreme Court Justice AM Sapre to examine the matter. In May of the previous year, the expert committee, in its findings, did not identify any initial lapses on the part of SEBI in the matter.

The Supreme Court observed that it had no grounds to question or undermine SEBI's credibility in its investigation into the accusations against the Adani group. The court emphasized that there was no evidence before it to cast doubt on the actions taken by the market regulator, and it clarified that the court is not obligated to accept the information presented in the Hindenburg report as an accurate representation of the facts. The court further stated that it cannot compel a statutory regulator to unquestioningly accept information from the media as the absolute truth.

Gautam Adani, the chairman of the Adani group welcomed the Supreme Court’s verdict. Taking to social media platform “X”, Gautam Adani posted, “The Hon'ble Supreme Court's judgement shows that: Truth has prevailed. Satyameva Jayate. I am grateful to those who stood by us. Our humble contribution to India's growth story will continue. Jai Hind.”