How Can We Protect Indian Investors: SC On Adani-Hindenburg Saga
Pleas sought a court-monitored probe on the Hindenburg Research report which caused Adani Group of companies to lose $100 billion in market cap.
Supreme Court said it was treading a cautious path when it asked the Centre to apprise the court on how it planned to ensure that Indian investors were protected against sudden volatility witnessed in the last two weeks because of the Adani-Hindenburg saga.
It is said that the total loss by Indian investors has run into several lakh crores, Chief Justice of India DY Chandrachud said.
Issuing notice, SC sought a reply from the Centre and the Securities and Exchange Board of India (SEBI)—the country’s statutory market regulator—on the existing regulatory framework, the relevant causal factors, and the need for putting into place a robust mechanism to protect investors.
“Thinking aloud” the bench comprising Chief Justice of India DY Chandrachud along with Justices PS Narasimha and JB Pardiwala suggested the need to form a broad multi-disciplined committee that would include experts from the “securities area”, “international financial law expert”, someone from the regulatory body led by the “wise guidance of a former judge”. This is just an open dialogue to ensure Indian investors are protected and we’re not on a witch-hunt, the bench said.
This body could think of ways to modify statutory regulatory provisions, put in place a mechanism so that a situation like this does not happen in the future and ways the Indian investors could be protected.
CJI Chandrachud acknowledged that the stock market today was unlike the one in the 90s and is no longer the exclusive domain of the rich. Today, the stock market is also a wide area for middle-class investors, he added.
When advocate ML Sharma asked why trading was not suspended to stem the loss, the bench advised caution while acknowledging that anything it said could affect the stock markets. Stock market also depends on sentiments you see, CJI Chandrachud said.
When Solicitor General Tushar Mehta said SEBI was on “top” of the situation, the top court clarified that any of its observations today are not intended to be or construed as any reflection on SEBI or any other statutory authority.
The top court’s direction came on two pleas that sought a court-monitored probe in the Hindenburg Research report on the Adani Group of companies which have caused a $100 billion dollar loss and roiled the Indian stock market.
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