Hindenburg-Adani dispute: Center accepts committee established by SC to tighten regulatory framework

The Supreme Court will convene a committee, which the Centre approved on Monday, to tighten the regulatory framework in the wake of the Hindenburg-Adani incident. It did, however, emphasize that the panel's mandate must be very clear in order to avoid affecting the flow of investments and money.

Tushar Mehta, the solicitor general, stated during a hearing that the government has no issues with appointing a committee to make recommendations on how to guarantee investors are safeguarded going forward and that the SEBI is qualified to handle the problem.

The Centre was requested by the Supreme Court to provide a note on the suggested terms of reference by Wednesday. On Friday, the next hearing will take place.

The Adani Group was accused of fraud in a study by US firm Hindenburg Research, which caused a sharp decline in its stock. On Friday, the highest court urged the government to put in place a "strong framework" by modifying legislation and enhancing supervisory oversight to shield thousands of investors.

A bench led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud proposed the creation of an expert committee under the direction of a retired judge to formulate the next steps in response to two public interest litigations (PIL) that highlighted how the shares of the listed firms of the Adani Group lost a record $120 billion (nearly 50% of value) in a matter of days, resulting in significant losses for investors.

The court ordered solicitor general (SG) Tushar Mehta, who represented the Center and market regulator Sebi, to submit a thorough report on the current regime and the changes that can be planned to make it more robust in the future by February 13. If the Union (government) is willing to accept the suggestion, the committee may make the necessary recommendation, the court stated in its order.