On SEBI Request For Extension In Hindenburg Probe, Supreme Court Decision On Monday

The Supreme Court today said it would decide on Monday on markets regulator SEBI's request for six months extension to complete its probe in the Hindenburg case, and indicated that it may agree to a three-month extension.

Hearing arguments, Chief Justice of India DY Chandrachud reprimanded petitioners for alleging failure on the part of SEBI (Securities and Exchange Board of India) in completing its investigation.

"It's unfair for you to say that when the court-appointed committee report is yet to be opened. You have to be careful in making such statements as it would affect the stability of the market," the Chief Justice told the petitioner.

On March 2, the Supreme Court directed SEBI to investigate within two months any violations before and after the Hindenburg report on the Adani Group.

Responding to petitions, the Supreme Court also appointed a panel of domain experts to look into India's regulatory mechanism to protect investors. The panel submitted its report to the Supreme Court's registrar earlier this week.

On April 29, three days before SEBI's deadline, the regulator asked for six more months. SEBI's lawyer said the matter involves cross-border jurisdictions, which will take time to process.

"We gave you two months. We are giving you three months, not six months. You complete the investigation in three months and come back," Chief Justice Chandrachud observed and listed the matter on Monday.

The government's top lawyer Tushar Mehta, appearing for SEBI, denied the regulator ever referred to "suspicious transactions" in its investigation. "Suspicious transactions were alleged by Hindenburg, not by SEBI," Mr Mehta told the Supreme Court during the hearing, which was streamed live.

The Supreme Court turned down the request of the petitioner's lawyer Prashant Bhushan to ask SEBI what it has found in its investigation so far.

"It is not a criminal case that the case diary needs to be sought," Chief Justice Chandrachud said.

SEBI is looking into several matters, including whether there was any violation of the securities contract rules on having at least 25 per cent public shareholding, whether related party transactions were not disclosed, and whether stock prices were manipulated in violation of laws.

The members of the Supreme Court-appointed expert group who are inquiring into India's regulatory mechanism to protect investors are retired Supreme Court judge Justice AM Sapre, retired Bombay High Court judge Justice JP Devadhar, former State Bank of India Chairman OP Bhatt, former ICICI Bank chief KV Kamath, Infosys co-founder Nandan Nilekani and securities and regulatory expert Somasekhar Sundaresan.