The Supreme Court on Friday observed that the Hindenburg Research report should not be treated as a statement of truth. While hearing petitioners plea on the factual revelations made in the Hindenburg report, the apex court said: “We don’t have to treat Hindenburg report as being a statement of truth.”The top court further said that there are no means of testing veracity of the Hindenburg report, that’s why it had asked Sebi to probe the matter.
"We don't have to accept the Hindenburg report as ipso facto factually correct. That is why we asked Sebi to investigate," the bench observed.
The petitioners further said the actions of the market regulator are "suspicious" as they have had the details since 2014. The Directorate of Revenue Intelligence (DRI) had shared details with the SEBI Chairman in 2014, they claim.
On Friday during the case hearing, Sebi said it had reached out to the Organized Crime and Corruption Reporting Project (OCCRP) for "key documents" , but it refused to share the documents. “They said we can get documents from Prashant Bhushan. Prashant Bhushan is getting a report made, and then pitching it before SC, this is a case of conflict.”
The petitioners told the Supreme Court that the reports published by the Financial Times and Guardian show that certain funds were run by Gautam Adani's brother Vinod Adani. “Sebi said we have completed investigation reports, but have not disclosed,” they added.
The apex court said: “Can Sebi be asked to disclose findings, even before SEBI can initiate proceedings under law? How can we pre-judge SEBI findings?”
The petitioners said that the top court should consider a court-appointed SIT, to which the Supreme Court observes, “Where is the material before us to doubt SEBI probe?”
The SC bench further said that Sebi can’t be asked to take a story in a newspaper, even if in Financial Times, as gospel truth. “Should Sebi begin chasing journalists who don’t fall under its jurisdiction”, the bench asked.“How is it that journalists can get these documents on controlling interest of Vinod Adani, but Sebi with all its powers cannot get access for years,” the petitioner noted in the court.
Hindenburg report on Adani Group
In its report published in January, New York-based short seller Hindenburg Research alleged accounting fraud and stock price manipulation at the Adani Group.
The report was released just prior to the launch of Adani Enterprises Ltd’s (AEL) Rs 20,000 crore follow-on public offer (FPO).
This triggered a major rout in the stock market that had erased about $145 billion from the conglomerate's market value at its lowest point.
On its part, the Adani Group has denied the allegations and said Hindenburg is as "an unethical short seller". In a detailed statement, the company said the report was "nothing but a lie".
Gautam Adani, Chairman of Adani Group, said the Hindenburg Research report was a mix of targeted misinformation and discredited allegations, aimed at tarnishing the conglomerate’s image.“The (Hindenburg Research) report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015. They were all settled by the appropriate authorities at that time. This report was a deliberate and malicious attempt aimed at damaging our reputation and generating profits through a short-term drive-down of our stock prices,” Adani said at the Group’s annual general meeting in July
