SC to govt: Protect investors' interest

Court seeks 'robust framework' with fresh laws for strong oversight

- Utkarsh Anand

The Supreme Court on Friday asked the government to put in place a "robust framework" by amending securities laws and strengthening oversight after Hindenburg Research's claims of stock manipulation and accounting fraud by the Adani Group led to the loss of about $120 billion in investor wealth.

The bench, headed by Chief Justice of India Dhananjaya Y. Chandrachud, said it was primarily concerned with protecting investors and facilitating a stable development of the securities market to prevent controversies similar to the one involving Adani group from leading to significant losses to investors in the future.

"The point that really bothers us is: How do we protect the interests of Indian investors? The petitions have alleged this to be a result of short-selling (by Hindenburg founder Nathan Anderson and his associates). If this was happening on a small scale, nobody would bother. But if the total loss of Indian investors goes up to several lakhs of crores, how do we ensure we have a robust mechanism in place going in future," the bench, also comprising justices P.S. Narasimha and J.B. Pardiwala, asked solicitor general Tushar Mehta, who appeared for the Centre and the market regulator Sebi.

Dealing with two public interest litigation (PIL) pleas that highlighted how the shares of listed firms of the conglomerate lost a record $120 billion (close to 50% of value) within a matter of days and led to massive losses to investors, the bench proposed constitution of an expert committee, under the supervision of a retired judge, to formulate the way forward.