Taking in view the drastic effects of Hindenburg report on shares of the Adani group companies and the Indian stock markets, the Government of India has agreed to the Supreme Court proposal on formation of a committee to determine whether the regulatory framework need modification, in order to protect the Indian investors from such incidents in future.
Directing Solicitor General Tushar Mehta to submit a remit of the committee by tomorrow, the Bench of Chief Justice of India (CJI) D.Y. Chandrachud, Justice P.S. Narasimha and Justice J.B. Pardiwala on Monday listed the matter for further hearing on February 17.
Appearing for the Centre, SG Mehta contended that although he had instructions that the Securities Exchange Board of India (SEBI) and other agencies were fully equipped to take care of the situation, but the Centre was willing to accept the Apex Court’s proposal regarding constitution of a committee.
He noted that the remit of the committee would be very relevant because any unintentional message to international investors or domestic investors that the regulatory authorities needed a monitoring by the committee could impact the flow of money.
SG Mehta sought permission of the Court to suggest names of the committee members in a sealed cover, stating that it may not be appropriate to discuss the same in an open court hearing. These were people of some calibre, he added.
The instructions were passed on two PILs filed by Vishal Tiwari and Manohar Lal Sharma seeking probe into the Hindenburg report.
The PIL filed by Tiwari sought constitution of a committee under the chairmanship of a retired Supreme Court Judge to investigate the contents of the Hindenburg Research Report.
The petition by Advocate Sharma sought to declare ‘short-selling’ as an offence of fraud. The plea urged the Apex Court to direct probe against Nathan Anderson, the founder of Hindenburg, for ‘exploiting’ innocent Investors via short selling under the ‘garb’ of artificial crashing.