NEW DELHI (TIP): The Supreme Court on Thursday, March 2, set up a six-member expert committee headed by former SC judge Justice AM Sapre to investigate if there had been a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies in the wake of the Hindenburg Research report. A three-judge Bench led by Chief Justice of India DY Chandrachud asked the committee to suggest measures to strengthen the regulatory framework and secure compliance with the existing framework for the protection of investors.
“To protect Indian investors against volatility (in the securities market) of the kind that has been witnessed in the recent past, we are of the view that it is appropriate to constitute an expert committee for the assessment of the regulatory framework and for making recommendations to strengthen it,” said the Bench, which had earlier refused to accept the names suggested by the Centre for the expert committee. Other members of the committee are former SBI chairman OP Bhatt, former Bombay High Court judge JP Devadhar, Infosys co-founder Nandan Nilekani, former chief of New Development Bank of BRICS KV Kamath and advocate Somasekhar Sundaresan, who was recently recommended for appointment as a judge of the Bombay High Court. The Bench, which included Justice PS Narasimha and Justice JB Pardiwala, asked the expert committee to submit its report in a sealed cover to it in two months. The top court also directed market regulator SEBI to investigate if there was any manipulation of stock prices in contravention of existing laws. It took note of the fact that SEBI was already investigating the allegations made in the January 24 Hindenburg Research report. On February 20, it had said it couldn’t start with the presumption of a regulatory failure.
“The above directions shall not be construed to limit the contours of the ongoing investigation. SEBI shall expeditiously conclude the investigation within two months and file a status report,” the Bench clarified.
“Further, SEBI shall apprise the expert committee of the action taken in furtherance of the directions of this court as well as steps taken in furtherance of its ongoing investigation. The constitution of the expert committee does not divest SEBI of its powers or responsibilities in continuing with its investigation into the recent volatility in the securities market,” it further clarified.