A "sealed" submission by the central government on a panel to strengthen regulatory measures and protect investors following the Adani stock collapse was turned down by the Supreme Court on Friday, which said it wanted "full transparency" in the matter.
The court had last week asked for suggestions on the formation of a panel of experts, including a judge, to examine the fallout of the fraud allegations against the Adani Group, which have wiped out crores in investor wealth and triggered fierce attacks on the government by the opposition.
Hearing a clutch of petitions that have called for the Supreme Court's intervention in the row, the top court on Friday reserved its order on the formation committee. The Adani Group has denied the accusations in the report, calling it a "reputational attack".
Stating that it was okay with an investigation into the report by US short-seller Hindenburg Research - which has made the allegations against the Adani group, triggering the stock rout - the government gave a list of names to the court for the panel.
However, Chief Justice DY Chandrachud told Solicitor General Tushar Mehta, "We don't want any sealed cover. We want full transparency... if we accept [these] suggestions, then it will be seen as a government-appointed committee, which we do not want. Leave it to us to decide."
One of the petitioners in the case told the Supreme Court they wanted "a proper valuation of the shares for loans being given by banks" as well as an audit of the Adani companies. Another petitioner, advocate ML Sharma, said he wanted "action against Hindenburg".
Senior lawyer Prashant Bhushan, representing a third petitioner, said they wanted a Special Investigation Team or SIT appointed by the Supreme Court to look into the Hindenburg report, flagging the alleged violation of stock market rules by the Adani Group.
"We are not objecting to an investigation on the [Adani Group] promoters or the Hindenburg report... SEBI (Securities and Exchange Board of India) and all regulatory bodies have discharged their duties so far," government lawyer Tushar Mehta said.
Reserving the court's order on the formation of the committee - meaning it will be delivered at a later date, Chief Justice Chandrachud said, "I have a problem with sparing a sitting judge." The court also observed that it cannot "presume" regulatory failure.
The ports-to-energy Adani Group - controlled by billionaire Gautam Adani, one of the world's richest people - has seen shares in its seven companies lose more than $100 billion in market value since the January 24 report by Hindenburg Research, which accused it of improper use of offshore tax havens and stock manipulation.
Adani has denied the charges, calling the conduct of the American firm "nothing short of a calculated securities fraud under applicable law". Last week, the group's flagship entity Adani Enterprises pulled its secondary share offering, India's largest ever, because of the sharp sell-off.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)