'Show Efforts Made To Verify Hindenburg Claims': What Lokpal Told Complainants Seeking Probe Against SEBI Chief

Lokpal directed TMC MP Mahua Moitra and former IPS officer Amitabh Thakur to bring verified credible material regarding corruption and allegation of quid pro quo with Adani group against SEBI Chairperson Madhabi Puri Buch

Lokpal said that it has reason to believe that the complainant without verifying the contents of the stated report (Hindenburg Report) and collating credible material, has rushed in his complaint

Source : Hindenburg Research alleges to SEBI chief Madhavi Puri Buch

The Lokpal headed by retired Supreme Court judge AM Khanwilkar in an order dated September 20 sought the details regarding the efforts made by the Complainants to verify the authenticity and credibility of the claims in the recent report of Hindenburg Research published on August 10. While deferring the hearing of two complaints filed by TMC MP Mahua Moitra and former IPS officer Amitabh Thakur, the Lokpal asked them to bring verified credible material regarding corruption and allegation of quid pro quo with Adani group against SEBI Chairperson Madhabi Puri Buch.

The Lokpal further directed the two complainants to file an affidavit explicating the foundational or jurisdictional facts which may constitute an "offence of corruption" against the SEBI chief. 

"In view of the prima facie observations noted hitherto (in the two cases), the Complainant in the respective cases are directed to file an affidavit explicating the foundational or jurisdictional facts, inter alia, to: Articulate the allegations against concerned person which may constitute an "offence of corruption" within the meaning of the Prevention of Corruption Act, 1988, 'provision wise'," the order read.

Complainant Rushed To File A Complaint After Downloading Report From The Internet: Lokpal

The Lokpal order read that it has reason to believe that the complainant without verifying the contents of the stated report (Hindenburg Report) and collating credible material, has rushed in his complaint on the same day online. It further said that the Complainant has merely reproduced the factual narrative in the stated report without verifying the same.

"Be that as it may, the Complainant claims to have come across the recent report of Hindenburg Research after its publication on 10.08.2024. From the chronology noted above, we have reason to believe that the complainant, without verifying the contents of the stated report and collating credible material, has rushed in his complaint on the same day online. Further, the Complainant has merely reproduced the factual narrative in the stated report. He has not attempted to verify the authenticity of the claim therein; and more so, how it is different from the earlier report of this very author (Hindenburg Research) published on 24.01.2023, which had been duly considered and critically commented upon by the Supreme Court in its decision dated 03.01.2024. In absence thereof, we may end up in entertaining the same subject matter already considered and negatived by the highest court of the land - even though the said decision has attained finality consequent to the dismissal of the review petition by the Supreme Court on 15.07.2024," the order read.

Though the Lokpal order has redacted from the order the names of the two complainants, it is in public that TMC MP Mahua Moitra and former IPS officer Amitabh Thakur had filed separate complaints with the Lokpal against SEBI chief.

 

On Moitra's complaint, Lokpal order said that it was primarily founded on the Hindenburg report and "it falls short of persuading us to take a firm view that there exists a prima facie case as per Section 20 of the Lokpal and Lokayuktas Act 2013 to proceed in the matter including to direct a preliminary inquiry or investigation..."

 

Based on these observations, the Lokpal has deferred action on two complaints filed against the SEBI Chairperson and has directed the complainants to produce additional "foundational and jurisdictional facts." 

Lokpal Asks If Supreme Court Verdict On SEBI Investigation Would Come In Way Of Complaints

The Lokpal has posed several questions to the complainants and listed the matter for further hearing on October 17. It has further said that if researched evidence is not given, then it may treat the complaints as per the Supreme Court judgment (dismissing plea for a SIT/CBI probe or meddle in SEBI affairs).

The Lokpal has directed the complainants to state in their affidavits why the finding and opinion recorded by the Supreme Court in its decision dated 03.01.2024 regarding fair and comprehensive investigation by SEBI and refusal to interfere with the outcome would not come in the way of the Lokpal to examine the allegations in the recent report of Hindenburg Research.

How Private Investments Made By Public Servant Before Taking Office Be Corruption? Lokpal Asks 

The Lokpal has further asked how the personal investments made or income earned by the named public servant (Sebi chief) and more so, prior to entering the office, constitute an offence of corruption within the meaning of the Prevention of Corruption Act, 1988.

It has further asked the complainants to state in their replies as to how non-disclosure or non-declaration of such investments and income would constitute an offence of corruption within the meaning of the Prevention of Corruption Act, 1988, provision wise.

"For, certain acts of commission or omission, may at best tantamount to an impropriety, but need not necessarily be reckoned as an illegality or for that matter an offence of corruption, ascribable to Prevention of Corruption Act, 1988," the order read.

It further asked them to state whether such investments or income comes within the period specified in Section 53 of the Act of 2013, to enable the Lokpal to exercise jurisdiction envisaged in the Act of 2013.

The Lokpal clarified that its observations in the order may not be construed as an expression of opinion one way or the other.

"This direction is only a procedural order, issued for testing the question of tenability of the concerned complaint and to record a prima facie view as required under Section 20 of the Act of 2013, in the peculiar fact situation," the order said.