New Delhi, Feb 17.
The Supreme Court on Friday rejected a suggestion to have a sitting judge examine if there were any loopholes in India’s existing regulatory mechanism, as alleged by the Hindenburg report on the Adanis, and instead said that it would set up an independent panel of experts to see if the existing regulatory structures ought to be overhauled to prevent a repeat of such incidents in the future.
Chief Justice of India D.Y. Chandrachud immediately dismissed the suggestion made by one of the petitioners seeking to get to the bottom of the matter. “A Supreme Court judge can hear this case. “But we cannot afford the luxury of allowing sitting judges to probe anything,” the CJI said.
Instead, he said, the bench would set up an independent panel to re-look at the existing regulatory structure for loopholes if any and suggest ways and means to strengthen it. This will prevent a repeat of such instances in the future and protect the interests of investors.
He cautioned against beginning the exercise with the presumption that there was a failure on the part of the regulatory authorities.
A slew of petitions had been filed in the top court seeking a probe into the fall-out of the Hindenburg into collapse of prices of Adani shares. These include one by activist lawyer Prashant Bhushan and lawyer Manoharlal Sharma.
Solicitor General Tushar, appearing for SEBI, argued that the regulatory authorities had diligently and promptly acted after the report. In any case, the impact on the Indian market had been negligible.
At the outset today, the government again claimed that the report’s impact on the market was not major. Mehta, however, suggested that the court set up a panel with limited remit to ensure that the market was not impacted.
“… it is an emotion driven market,” he said. He also suggested some names in a sealed cover to the court. The government has earlier expressed its opposition to the court examining any other aspect other than the regulatory aspect.
The bench rejected the names suggested by the government for the task as well. “We will select the experts… If we take names of the government it would amount to a government-constituted committee. There has to be confidence in the committee.”
The bench will pass formal orders on this at a later date.
Bhushan suggested names of former judges of the top court with impeccable reputations too, but the bench would not hear of appointing anyone suggested by any party.
Bhushan drew parallels of this case with the Mundra scam and suggested a court-monitored probe by a Special Investigation team (SIT) or the CBI.
He also demanded that the probe include the role played by bankers in public sector banks who facilitated the scam.
