New Delhi: The Supreme Court on Friday, February 10, expressed concern for Indian investors in the wake of the Adani-Hindenburg issue, and sought the views of the Union government and Securities and Exchange Board of India (SEBI) on how to improve the regulatory mechanism, Livelaw.in reported.
Chief Justice D.Y. Chandrachud, who headed a three-judge bench, also proposed forming a committee of experts for strengthening the regulatory framework in the country. The top court was hearing two petitions into the allegations levelled by the US-based short-selling firm Hindenburg Research against Adani Group of stock manipulation and accounting fraud.
During the hearing, the CJI said, “This is just an open dialogue. They have brought an issue before the court. What is of concern is how do we ensure the protection of Indian investors.” The CJI told the solicitor general of India, Tushar Mehta, who represented SEBI in the court.
Continuing further, CJI said, “What happened here was short-selling. Probably SEBI is also doing its investigation. Please tell your officers also this is no witchhunt that we are planning to do. Suppose as a result of short-sale, the value of shares can get depressed. The purchaser then gets the benefit of the difference. If it is happening on a small scale, nobody bothers.
But if it happens in a large scale, as per some reports, the total loss suffered by Indian investors go in the range of several lakhs crores of rupees. How do we ensure that going in future, we have robust mechanisms? Because today, capital is moving in and out of India seamlessly. How do we ensure in future that Indian investors are protected? Everybody is in the market now. It is said that the loss is of over ten lakh crores. How do we ensure that they are protected? How do we ensure that this does not happen in future?”
To this, the solicitor general responded by saying that SEBI was “closely monitoring the situation”.
The CJI then said, “You can also have a consultation with experts from the ministry of finance. Give us a framework. These are just loud thinking. We are conscious that whatever we say may also affect the stock market. It runs largely on sentiments. So we are cautious.”
The next hearing on the matter will be heard on Monday, February 13.