Adani-Hindenburg Dispute: Supreme Court Rejects Petition, Upholds SEBI Investigation

the Supreme Court announced on Wednesday that it would not intervene in the regulatory jurisdiction, providing a substantial victory for the Adani Group. The court clarified that reports from entities like Hindenburg cannot serve as a basis for initiating a separate investigation, emphasizing the autonomy of the Securities and Exchange Board of India (SEBI) in conducting its probe in accordance with the law.

The apex court firmly rejected the idea of a Special Investigation Team (SIT) taking over the inquiry from SEBI. In delivering the verdict, the court highlighted the limited scope of its authority within the SEBI regulatory framework. The court found no compelling reasons to direct SEBI to reverse its amendments on Foreign Portfolio Investment (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations.

SEBI, having diligently pursued investigations in 20 out of 22 cases, received a vote of confidence from the court. The remaining two cases are expected to undergo thorough scrutiny within the next three months, as outlined in the court's order.

Crucially, the court dismissed the relevance of the Office of the Chief Corporate Regulatory (OCCPR) report in casting doubt on SEBI's investigation. The order emphasized the rejection of reliance on third-party reports without proper verification, stating that such reports should be considered as inputs rather than conclusive evidence. The court explicitly discouraged the use of newspaper reports and third-party organizations as grounds for questioning the statutory regulator, underlining the need for concrete evidence to doubt SEBI's probe.