June 4 Market Crash Reopens Adani-Hindenburg Matter As Plea In SC Seeks Sebi, Centre Reports On Investors' Loss
The stock market crash reported on June 4, the day of counting for votes polled in Lok Sabha elections 2024, has now reached the Supreme Court, via the Adani-Hindenburg market crash case
The stock market crash reported on June 4, the day of counting for votes polled in Lok Sabha elections 2024, has now reached the Supreme Court. A plea has been filed in the top court seeking directions to Centre and the Securities and Exchange Board of India (SEBI) to provide a detailed report on the June 4 Market crash and the loss of investors after the election results were announced.
Advocate Vishal Tiwari moved an Interlocutory Application (IA) in the writ petition filed in the Adani-Hindenburg market crash case. The top court had asked tha Centre and Sebi to consider expert committee recommendations to strengthen the regulatory framework to protect the interests of the investors.
The petition states that it is public's right to know if the investors suffered the losses due to some irregularities and violations by any Corporate group. Tiwari submits that the report on Adani-Hindenburg matter shall be placed on record and shall not remain hidden and burried.
In January, the apex court directed Centre and Sebi to probe and take action if the probe reveales that Indian investors suffered loss due to Hindenburg research or any other entities taking short position and if that is found to be in "infraction of law."
The application further contends that it is unclear whether Sebi has completed pending investigations in compliance with the court order and whether any records have been submitted to the court.
Tiwari has stated in his plea that nearly Rs 20 lakhs were lost in the market crash post tha General elections result on June 4.
Indian markets hit a record low after the Hindenburg Report and certain newspaper reports allege that some Foreign Portfolio Investments in Adani group stocks in the Indian stock market are owned by shell companies based outside India, which have close connections with the Adani group. The short-seller report alleged that such investments in Adani stocks allow the Adani group to maintain financial health and artificially boost the value of stocks in the market, in violation of Indian law.
The Supreme Court verdict in January 2024, handed out by a bench of Chief Justice DY Chandrachud, and Justices JB Pardiwala and Manoj Misra, declined to order an independent probe into the allegations raised in a report by US-based short-selling firm Hindenburg Research.
However, the top court ordered Centre and SEBI shall constructively consider the suggestions of the Expert Committee in its report.
"These may be treated as a non-exhaustive list of recommendations and the Government of India and SEBI will peruse the report of the Expert Committee and take any further actions as are necessary to strengthen the regulatory framework, protect investors and ensure the orderly functioning of the securities market; and...SEBI and the investigative agencies of the Union Government shall probe into whether the loss suffered by Indian investors due to the conduct of Hindenburg Research and any other entities in taking short positions involved any infraction of the law and if so, suitable action shall be taken," the verdict read.
The current plea seeks the report on the same for Adani matter as well as the market crash following Lok Sabha results.
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