New Delhi, March 2.
The Supreme Court on Thursday appointed an expert panel, which will examine ways and means to strengthen the Indian regulatory framework, in the wake of the Hindenburg fallout on Adani shares. The panel will be headed by former top court judge Abhay Manohar Sapre.
It will include among others Nandan Nilekani, O.P. Bhatt, J.P. Devadhar, former High Court judge, and K.V. Kamat and Somashekaran Sunderesan. The court decision to set up an expert panel will not impede the existing probe into the incident already being undertaken by market regulator SEBI.
A three-judge bench led by Chief Justice of India D.Y. Chandrachud asked SEBI to complete its probe in two months and submit a status report to the top court. Among other things, the top court asked SEBI to probe if there was any insider trading or manipulation of the markets.
The expert committee will report back to the court on how to strengthen the existing regulatory mechanism to prevent a repeat of the recent bloodbath in the markets in the aftermath of the Hindenburg report.
Share prices of the Adani group took a tumble causing huge losses to investors. The CJI took note of this to set up an expert panel to prevent such incidents in the future.
The court was dealing with two petitions filed regarding the Hindenburg report, one by lawyer Manoharlal Sharma and another by lawyer Vishal Tiwari. Sharma had sought criminal action against those responsible the developments while Tiwari had sought an independent probe by a judge.
The bench, also comprising Justices P.S. Narasimha and J.S. Pardiwala, had earlier noted that the stock market was no longer the preserve of the wealthy few, rather it was an attractive investment option for the middle class too.
The loss to the investors has been (estimated) around Rs 10 lakh crores, CJI Chandrachud observed. This was worrying when seamless capital flow is the norm and everyone is an investor,
“How do we ensure that this doesn’t happen in the future? What role should be envisaged for SEBI in the future?” the CJI asked SEBI, represented in court by Solicitor General Tushar Mehta.
The bench had clarified that it was not casting any doubts over SEBI’s regulatory processes or the existing regime, but only wanted to prevent a repeat of such things in the future.
The CJI had called for an evaluation of the existing regulatory regime, the relevant causal factors behind the recent developments and a recasting of the procedures to plug such happenings.
In this context, the CJI had called for immediate consultations with experts from the securities markets, former judges, and international finance law.
The recent developments have led to a lot of volatility in the markets and also caused worry over the state of several banks with exposure to the Adani group.
