The Supreme Court on Friday asked the Securities and Exchange Board of India (SEBI) what steps it plans to take to protect investors from excessive stock market volatility. A bench of Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Mishra remarked on the stock market volatility while hearing petitions related to the Adani-Hindenberg dispute.
The bench asked Solicitor General Tushar Mehta, representing SEBI, what strategy he had “to keep investors safe from market risk and volatility.” The court further asked “whether SEBI has assessed that Is it necessary to tighten the rules? What action does SEBI intend to take to ensure investor protection?”
On this, the Solicitor General said that definitely we are protecting the interests of the investors and should continuously protect their interests.
The bench said SEBI needs to take steps to prevent future incidents of loss of investors’ money due to short selling or stock market volatility. The bench also asked, “What has SEBI done so far to check market volatility?”
The Solicitor General gave sequential answers to all the questions of the court and provided the information sought. After this the Supreme Court reserved the decision.
Meanwhile, a petitioner also demanded an order to investigate LIC and SBI into some media reports. The bench objected to this and also cautioned the petitioner.
Earlier, the Solicitor General told the Supreme Court that, out of 24 cases related to allegations against Adani Group, investigation has been completed in 22. For the remaining two, we need to gather information from foreign regulators as well as some other facts. It is necessary. We are in touch with them. As soon as we have all the information, it will be informed to the court.
During the hearing, the bench also asked whether SEBI had found any irregularities in the area of short selling. Mehta said that whenever the capital markets regulator detects short selling, they take action as per the SEBI Act.
He said that in terms of regulatory framework, the report has been prepared in line with the suggestions of the expert committee appointed by the apex court.
Advocate Prashant Bhushan, representing one of the petitioners, also argued in the case and raised questions on the credibility of the SEBI investigation. The bench also heard arguments from advocates representing other petitioners.
On May 17, the apex court had given SEBI time till August 14 to complete the investigation into the allegations of manipulation in the stock price of Adani Group.
The Supreme Court-appointed expert committee said in an interim report in May that it had found “no clear pattern of manipulation” in billionaire Gautam Adani’s companies. SEBI’s failure has also not come to light in this.
However, the expert committee cited amendments made by SEBI between 2014 and 2019 that limited its ability to investigate, and that its investigations into alleged violations in money flows from offshore entities “did not reveal anything.” Found.”
