In a relief to the Adani Group, the Supreme Court on Wednesday refused to transfer the probe into the allegations of stock price manipulation by the Indian corporate giant to a special investigation team and directed market regulator SEBI to complete its probe into two pending cases within three months.
Holding that the court must refrain from substituting its own wisdom over the regulatory policies of the Securities and Exchange Board of India (SEBI), a bench headed by Chief Justice D Y Chandrachud said the facts of the case do not warrant a transfer of investigation from the SEBI.
The apex court noted that SEBI has completed 22 out of the 24 investigations into the allegations levelled against the Adani Group.
"Noting the assurance given by the Solicitor General on behalf of SEBI, we direct SEBI to complete the two pending investigations expeditiously, preferably within three months," the bench, also comprising Justices J B Pardiwala and Manoj Misra, said.
It also rejected the reliance placed by one of the petitioners on the Organised Crime and Corruption Reporting Project (OCCRP) report to suggest that SEBI was lackadaisical in conducting the investigation.
"A report by a third party organisation without any attempt to verify the authenticity of its allegations cannot be regarded as conclusive proof," the bench said.
The top court delivered its verdict on a batch of petitions on the Adani-Hindenburg row over allegations of stock price manipulation by the Indian corporate giant.
While pronouncing the verdict, the CJI said the SEBI should take its probe to a logical conclusion in accordance with the law.
"The facts of this case do not warrant a transfer of investigation from SEBI. In an appropriate case, this court does have the power to transfer an investigation being carried out by an authorised agency to an SIT or to the CBI. Such a power is exercised in extraordinary circumstances…," the bench said.
It said the allegation of "conflict of interest" against some members of the court-appointed expert committee is unsubstantiated and is rejected.
Observing that the power of the court to enter the regulatory domain of SEBI in framing delegated legislation was limited, the bench said, "The scope of judicial review, when examining a policy framed by a specialised regulator, is to scrutinise whether it violates fundamental rights, any provisions of the Constitution, any statutory provisions or is manifestly arbitrary".
It said no valid grounds have been raised for this court to direct SEBI to revoke its amendments to the Foreign Portfolio Investors (FPI) and Listing Obligations and Disclosure Requirements (LODR) regulations.
The bench said the Centre and the SEBI shall constructively consider the suggestions of the expert committee, peruse its report and take necessary steps to strengthen the regulatory framework.
The judgment on the PILs, filed by lawyers Vishal Tiwari, M L Sharma, Congress leader Jaya Thakur, and Anamika Jaiswal, was reserved on November 24 last year.
The Adani Group stocks got bludgeoned on the bourses after Hindenburg Research made a litany of allegations, including those about fraudulent transactions and share-price manipulation, against the business conglomerate.
The Adani Group dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
One of the PILs had alleged that changes to the Securities and Exchange Board of India Act (SEBI Act) provided a 'shield and an excuse' for the Adani Group's regulatory contraventions and market manipulations to remain undetected.
The top court had then asked the SEBI to independently investigate the matter and constituted a committee of experts headed by former apex court judge Justice AM Sapre.
The court-appointed expert committee had in an interim report in May stated that it saw "no evident pattern of manipulation" in billionaire Gautam Adani's companies and there was no regulatory failure.
