Supreme Court Dismisses Review Plea Against Adani-Hindenburg Verdict

Apex Court Rejects Petition Seeking Probe into Allegations of Stock Price Manipulation

In a significant development, the Supreme Court of India has dismissed a review petition challenging its earlier judgment in the Adani-Hindenburg case. The court had previously refused to order a separate investigation into the allegations of accounting fraud and stock manipulation against the Adani Group companies, as raised in a report by the US-based short-seller Hindenburg Research.

The three-judge bench, led by Chief Justice of India Dhananjaya Y. Chandrachud, found no merit in the plea filed by Anamika Jaiswal , one of the original writ petitioners in the case. The court stated, "Having perused the review petition, there is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules 2013. The review petition is, therefore, dismissed."

Sebi's Ongoing Investigation Endorsed by the Court

In its January 3 verdict, the Supreme Court had endorsed the investigation being carried out by the Securities and Exchange Board of India (Sebi) into the Adani-Hindenburg matter. The court had concluded that there was no material to show "glaring, willful, or deliberate inaction" by Sebi in its investigation or any suggestion of regulatory failure by the market regulator.

The review petition had claimed that Sebi's status report merely indicated the completion status of the 24 investigations without disclosing any findings or details on actions taken. The petitioner argued that unless Sebi's investigation findings are publicly reported, it cannot be concluded that there was no regulatory failure.

Dismissal of Reliance on Unsubstantiated Reports

The Supreme Court, in its earlier judgment, had rejected the reliance on the Hindenburg report or other unsubstantiated news reports as the basis for questioning Sebi's comprehensive investigation. The court held that newspaper articles or reports by third-party organizations cannot be treated as conclusive proof of Sebi's probe inadequacy.

Tightening of FPI Regulations Upheld

The review petition had also sought to re-argue that the legislative amendments made by Sebi in 2018 and 2019, which tweaked the Foreign Portfolio Investors (FPI) regulations, diluted the requirements for disclosing beneficial owners and listing disclosures. However, the court had rejected this contention, ruling that the impugned amendments had, in fact, tightened the norms on disclosure of beneficial owners under the FPI and Listing Obligations and Disclosure Requirements (LODR) regulations.

Conclusion

The Supreme Court's dismissal of the review petition is a significant victory for the Adani Group and a validation of Sebi's ongoing investigation into the allegations raised by Hindenburg Research. The court's stance reinforces the importance of relying on substantive regulatory oversight and due process, rather than unsubstantiated claims, in addressing complex corporate governance issues.

As the Adani-Hindenburg saga continues to unfold, the Supreme Court's unwavering position on the matter underscores the need for a robust and transparent regulatory framework to protect the interests of investors and maintain the integrity of the Indian stock market.