Hindenburg-Adani dispute: Centre accepts commission established by SC to tighten the regulatory framework

The Centre agreed on Monday to a Supreme Court-appointed committee to enhance the regulatory regime in the aftermath of the Hindenburg-Adani incident. It did, however, emphasize that the panel’s mandate must be very clear to not disrupt the flow of money and investments.

During a hearing, Solicitor General Tushar Mehta stated that the government has no issue with appointing a committee to recommend ways to protect investors in the future and that the SEBI is able to handle the situation.

By Wednesday, the Supreme Court requested that the Centre give a memorandum on the proposed terms of reference. The next hearing will take place on Friday.

On Friday, the Supreme Court urged the government to establish a “robust framework” by amending laws and strengthening supervisory control to protect thousands of investors who were harmed after a report by US firm Hindenburg Research accused the Adani Group of fraud, causing its stocks to plummet.

In response to two public interest litigations (PIL) highlighting how the shares of the Adani Group’s listed firms lost a record $120 billion (close to 50% of their value) in a matter of days, resulting in massive losses to investors, a bench led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud proposed the formation of an expert committee under the supervision of a retired judge to formulate the way forward.

“If the Union (government) is willing to accept the suggestion, the committee may make the necessary recommendation,” the court said in its order while asking solicitor general (SG) Tushar Mehta, who appeared for the Centre and market regulator Sebi, to submit a detailed report on the current regime and the changes that can be planned to make it more robust in the future by February 13.