How could the Hindenburg report on Adani group be treated as 'credible', SC questions Prashant Bhushan (Lead)

New Delhi: The Supreme Court on Friday asked advocate Prashant Bhushan as to how the apex court could treat the Hindenburg report on Adani Group of companies as "credible".

CJI DY Chandrachud, who headed the 3-judge bench hearing the pleas pertaining to the Adani-Hindenburg controversy, said that the top court will have to rely on "our investigative agencies" as Bhushan raised questions on credibility of investigations undertaken by the SEBI in the matter.

"Where is the material before us to doubt the SEBI’s investigation. The SEBI is a statutory body entrusted to investigate stock market violations. Is it proper for the highest court -- without any material -- to reconstitute an SIT of our own,” said the bench, also comprising Justices J.B. Pardiwala and Manoj Misra.

Bhushan, appearing on petitioners’ behalf, urged the apex court for formation of some other SIT or group of experts to conduct the investigation in the Adani-Hindenburg controversy. He said that investigation reports prepared by the SEBI have not been disclosed.

At this, CJI Chandrachud said: "Mr Bhushan, they (SEBI) have completed the investigation. They are saying that now it's in their quasi judicial power. Should SEBI disclose the investigation before they issue a notice of show cause?"

The SEBI could not "pre-charge" guilt without giving an opportunity of hearing to entities under investigation, he added.

During the hearing, Solicitor General Tushar Mehta, appearing for the SEBI, said that the market regulator is not seeking any extension of time and 22 out of 24 investigations have already been finalised.

In relation to the remaining two cases, he said that the reports are interim in nature and the SEBI has sought information from foreign agencies and has no "control on time limit".

During the hearing, the apex court stressed that the Union government and the SEBI should take steps to prevent investors’ loss in future.

"One of the principal reasons which led us to intervene – was because of this extreme volatility of the stock market which had caused loss to investors' wealth.

"Now, what is SEBI intending to do to protect this kind of volatility due to short selling which leads to a loss of investor value," the CJI-led bench asked Mehta.

Mehta said that in cases involving short-selling, the SEBI is taking legal action in accordance with the law.

"Wherever we found short selling, we will take action and we are taking action," he said.

The Supreme Court also made stern observations against pleas seeking probe into the Life Insurance Corporation (LIC) and the State Bank of India (SBI).

"You are asking the court – without a shred of evidence – to direct an investigation into SBI and LIC. Do you realise the impact of such a direction? Is this some debate in college?" it said.

After hearing the parties at length, the top court reserved its verdict in the matter.