Arrest of Adani: SC sets up panel to probe ‘failures’

NEW DELHI: The Supreme Court on Thursday established a five-member committee headed by former Justice AM Sapre to investigate alleged regulatory shortcomings in preventing suspected violations of market rules by Adani Group, whose shares dissolved following the Hindenburg report on January 24 and requested the panel report within two months.
A bench of Chief Justices DY Chandrachud and judges PS Narasimha e JB Pardiwala he said the judging panel will have former SBI chairman OP Bhatt, a former Bombay HC judge JP Devadarveteran banker KV Kamath, Infosys founder and non-executive chairman Nandan Nilekani and commercial law expert Somasekhar Sundaresan.
The SC allowed Sebi to continue its investigation into the Hindenburg Report allegations against the Adani Group, but said the market regulator had expressly not referred to an investigation into the alleged violation of Securities Contracts (Regulation ) Rules 1957 on maintaining a minimum public holding in a public limited liability company.
While setting up an expert panel to investigate alleged regulatory failures to identify possible violations of laws that led to Adani Group’s shares plummeting, the supervisory board on Thursday said it was imperative Indian investors are protected from volatility. of the market of the type witnessed in the recent past.
“We believe it is appropriate to set up a committee of experts to evaluate the existing regulatory framework and to make recommendations to strengthen it,” said the CJI-led panel and asked the committee to present its report to the court “in a sealed lid” within two months.
Somasekhar Sunderasan, appointed on Thursday to the panel set up by SC, had been recommended for appointment as a Bombay HC judge in February last year, but the Center had returned him for review by the collegium on the grounds that he was a “highly opinionated person prevented”. On 18 January this year, the collegium rejected the objections and reiterated the recommendation, stating that ‘Sundaresan specializes in commercial law and would be an asset to Bombay HC which has a large volume of commercial and securities law cases , among other branches”. .
The Supervisory Committee instructed the committee to “provide a comprehensive assessment of the situation, including relevant causal factors that have led to volatility in the securities market in the recent past, to suggest measures to enhance investor awareness, to investigate whether there was a regulatory failure to address the alleged violation of securities market laws in relation to the Adani Group or other companies, and suggest measures to strengthen the regulatory and/or regulatory framework, and ensure compliance with the existing framework for the investor protection”.
The bank has asked the chairman of the Securities and Exchange Board of India (Sebi) to ensure that all necessary information is provided to the committee. “All government agencies in the Union, including agencies related to financial regulation, tax agencies and law enforcement agencies, must cooperate with the committee. The committee is free to call on outside experts in its work,” he said .
The SC said Sebi must complete its investigation into the allegations against the Adani group within two months and submit a status report. While pointing to Adani’s alleged violations of provisions for maintaining minimum public ownership in a joint-stock company, the SC said the Sebi investigation needs to look into other allegations leveled against the group.
It also ordered the market regulator to inform the panel headed by judge Sapre of the action taken following the directives of the scientific committee as well as the measures taken in support of its ongoing investigation.


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