Context: Writ petition was filed in SC because of concerns raised over the decline in investor wealth and volatility in share market due to fall in share prices of Adani group.
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Background: The situation was caused by a report published by Hindenburg research about the financial transactions of the group.
- The report alleged that the Adani group manipulated its share prices and failed to disclose transactions with related parties and other relevant information in violation of the regulations framed by SEBI and provisions of securities’ legislation.
- Subsequently, Hindenburg Research took a short position in the Adani group through US-traded bonds and non- Indian traded derivative instruments.
Outcome of judgement:
- SC has said that the Investigation conducted by the SEBI into the Adani Group “inspires confidence” and was prima facie comprehensive. The market regulator had already completed 22 out of the 24 investigations into the group.
- The court has further ordered the SEBI to expeditiously complete the pending investigations, within three months, and said the regulator could not leave the probe “open-ended and indeterminate in time”.
- The judgment refused the allegation that SEBI’s amendments in the Foreign Portfolio Investors Regulations and Listing Obligations and Disclosure Requirements (LODR) Regulations had been conducted as an exercise in “first opening a loophole and then plugging the loophole with deferred effect” and has now hindered the regulator’s investigation.
About Securities and Exchange Board of India:
- The Securities and Exchange Board of India was constituted as a non-statutory body on April 12, 1988 through a resolution of the Government of India.
- The Securities and Exchange Board of India was established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992.
Objectives of SEBI
- SEBI is entrusted with regulating the functioning of the Indian capital market. The objectives of SEBI as a regulatory body are to monitor and regulate India's securities market to safeguard investors' interests.
- It aims to inculcate a safe investment environment by implementing several rules and regulations and formulating investment-related guidelines.
- One of the main objectives is to avoid malpractices in the Indian stock market.