Hindenburg report intensifies calls for SEBI to conclude Adani investigation as Supreme Court petition challenges delay

A new report by US-based short seller Hindenburg Research has reignited controversy over the ongoing investigation by the Securities and Exchange Board of India (SEBI) into the Adani group, prompting a petition to the Supreme Court. This report raises serious allegations of a conflict of interest involving SEBI Chairperson Madhabi Puri Buch, suggesting she and her husband may have stakes in offshore companies linked to Adani and potentially affecting SEBI's investigation.

Advocate Vishal Tiwari, a key figure in the original case against Adani, filed the petition following the registry's refusal to list an application seeking a status update on SEBI's probe. Tiwari has been actively pursuing transparency in the investigation, initially petitioning for a special investigation team (SIT) or Central Bureau of Investigation (CBI) inquiry into the alleged stock market manipulation by the Adani group, as reported by Hindenburg in January 2023.

In January, the Supreme Court dismissed calls for a CBI/SIT probe, instead endorsing SEBI's investigation and advising it to aim to complete the probe within three months. However, on June 3, Tiwari filed an application in the disposed writ petition, urging SEBI to adhere to the timeline set by the Supreme Court. Despite this, on August 5, the Supreme Court's Registrar declined to accept Tiwari's application, arguing that the term "preferably" in the original court order did not constitute a firm deadline.

The Registrar also stated that the Supreme Court had not mandated SEBI or the central government to submit status reports regarding the recommendations of an expert committee tasked with strengthening stock market regulations. In response, Tiwari contended that this decision impeded his fundamental rights and access to justice, stressing the need for transparency for the public and investors affected by the 2023 Hindenburg allegations against Adani.

The latest Hindenburg report, released on August 10, has exacerbated the situation by reiterating accusations of stock manipulation against the Adani group. This has created an "atmosphere of doubt" among the public and investors. Tiwari's plea underscores the urgency for SEBI to finalize its investigation and make its findings public to restore confidence in the market.

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SEBI has urged investors to remain calm, affirming its commitment to a thorough investigation and the integrity of the Indian capital market. In light of the allegations, SEBI Chairperson Madhabi Puri Buch has recused herself from matters involving potential conflicts of interest. Both Buch and her husband have publicly denied the conflict of interest allegations, emphasising their commitment to transparency and impartiality.