Adani-Hindenburg issue: Committee to be formed for better functioning of the stock market, SEBI will present a report in sealed cover

The central government on Monday expressed its willingness to set up a committee to determine whether it is necessary to change the regulatory framework to protect Indian investors in the wake of the Adani-Hindenburg issue. India’s Attorney General Tushar Mehta said that I am instructed that SEBI and other agencies are fully equipped to deal with the situation not only in terms of governance but also in other aspects. However, responding to the court’s suggestion, the government has no objection to establishing a committee. But the committee’s decision will be highly relevant as any unintended message to international or domestic investors that regulatory authorities should be monitored by the committee may have some adverse effect on the flow of funds. We can provide names in a sealed cover with a possible suggestion of committee member names. The Supreme Court will hear the Adani-Hindenburg case on February 17.

Chief Justice of India DY Chandrachud suggested that the SG submit a note on the committee’s proposed injunction by Wednesday and agreed to hear the matter on Friday. The bench agreed to this and listed the matter on February 17, 2023. A bench consisting of CJI DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala was considering two PILs submitted by Vishal Tiwari and Manohar Lal Sharma, seeking to investigate the Hindenburg Report. On February 10, the Court expressed concern about protecting Indian investors from the market volatility ensured following the publication of the Hindenburg Report and sought the opinion of the Center and SEBI on measures to strengthen the regulatory framework.

During the hearing, the CJI had proposed the creation of a commission. He had said that one of the suggestions is to form some committee… We don’t want to put any doubt on SEBI or the regulatory agencies. But the suggestion is a broad thought process to get some input. So the government can consider whether any amendment is required in the law, whether the regulatory framework requires amendment. After a certain stage, we won’t get into the realm of politics, but there should be a mechanism that doesn’t. It won’t happen in the future. This is a call that the government has to take. We need to establish a mechanism that ensures that this does not happen in the future.