The Supreme Court on 10 February noted that the investors in Adani Group suffered losses after the short-seller Hindenburg Research's report and observed that there is a need to safeguard investors.
While hearing the two public interest litigations (PILs) seeking a court-monitored probe, the apex court bench, chaired by Chief Justice of India DY Chandrachud and Justices PS Narasimha and JB Pardiwala asked the Securities and Exchange Board of India (SEBI) to suggest measures to ensure protection of Indian investors after the short selling report on Adani Group.
It is said total loss by Indian investors is several lakh crores....How do we ensure they are protected.. it is said 10 lakh crores. How do we ensure that this does not happen in future. What role should be envisaged for SEBI in future," the CJI's remarked.
Following this, the bench then ordered the market regulator to file a response detailing how a more robust mechanism can be put in place.
"The response can contain existing regulatory framework, the relevant causal factors, the need for putting into place robust mechanism to protect investors. f the union is ready to accept the suggestion, the necessary recommendation of the committee may be made. A brief note on legal and factual matrix may be filed by the SG by next Monday," the legal daily quoted the Court order.
After hearing this, the bench then suggested on having an expert committee and also conferring wider powers on SEBI.
"You can show us what is the existing structure and how to strengthen the existing regime and can we contemplate having an expert committee which can have experts. Experts can be from securities area, wise guidance of a former judge, international financial law expert etc. We can give a wider role to SEBI also and SEBI can threadbare analyse powers which exist and how it can be improved since capital flow will become more seamless," the bench as said.
Now, the Supreme Court has fixed hearing on two PILs seeking probe into Hindenburg report on Adani Group on 13 February.
Earlier, Advocate Manohar Lal Sharma filed a public interest litigation (PIL) petition in the Supreme court seeking directions to SEBI and Union Home Ministry to conduct an inquiry against founder of Hindenburg Research Nathan Anderson.
The second PIL was filed by Advocate Vishal Tiwari who has sought an inquiry into the Hindenburg report by a committee, that would be headed by a retired judge of the top court.
Meanwhile, Gautam Adani has hired one of the most expensive law firms in the US – Wachtell Lipton – to fight back against America-based short-seller Hindenburg Research which has put charges of fraud and market manipulation on the conglomerate.
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