Adani-Hindenburg: To protect investors, Indian govt. says yes to Supreme Court panel probe

The Indian government on Monday accepted Supreme Court's suggestion to form an expert-level committee to look into the allegations made by Hindenburg against the Adani group and protect the investors. Earlier, market regulator Securities and Exchange Board of India (SEBI) had also given its nod to the committee.

Representing the centre, Solicitor General Tushar Mehta, however, added that the government will like to have a say in the composition of the panel.

"We will suggest names of the experts to be included in the committee in a sealed cover. Some names may appeal to the Supreme Court, and some may not. But these names should not be discussed and opposed by the petitioners. The SC can choose from the list," he said in front of a bench of Chief Justice DY Chandrachud, and Justices PS Narasimha and JB Pardiwala.

Mehta added no such message should go out to the investors that SEBI was incapable of handling the situation.

"Our instructions are that existing structure - SEBI and other agencies - are fully equipped not only regime wise but otherwise also, in taking care of the situation."

Last Friday, the apex court, taking a grim view of the rout in shares of the Adani group stated that investors had suffered losses running into several billion dollars. The court suggested that a mechanism was needed to protect the investors and put forth the idea of an expert committee.

The decision by the centre to greenlit the committee comes on the same day as a Bloomberg report claiming that Adani group had halved its revenue growth plans. Additionally, the company was looking to scale down fresh capital expenditure.

Gautam Adani's conglomerate has tapered its revenue growth to 15 per cent to 20 per cent for the next financial year, down from the previous target of 40 per cent.

The idea behind managing the expectations regarding revenue growth is to rebuild investor confidence, the publication added.

On Tuesday, a Reuters report claimed that the Adani group had roped in US-based firm Grant Thornton LLC to conductan independent audit of some of the companies.

After the Hindenburg report came out, Adani and its affiliate companies have lost more than $120 billion in market value so far.

The Hindenburg report accused the Adani group of stock manipulation using tax havens whilst having unsustainable debt.

The report and the damning allegations made in it forced the Adani group to call off its $2.5 billion share sale.

(With inputs from agencies)

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