The Supreme Court (SC) on March 2 formed an expert committee headed by a former Supreme Court judge Abhay Manohar Sapre to investigate if there was a regulatory failure leading to investor losses after the adverse report by American short-seller Hindenburg Research on the Adani group of companies came out.
- The committee will comprise former State Bank of India chairman O P Bhatt, retired judge J P Devadhar, Infosys co-founder Nandan Nilekani, banking veteran K V Kamath, and Mumbai-based advocate Somashekhar Sundaresan as other members.
Key points
- The apex court said the panel would also probe if there was a regulatory failure in dealing with the allegations against the Adani group or other companies pertaining to the securities market.
- The remit of the Committee shall be to provide an overall assessment of the situation including the relevant causal factors which have led to the volatility in the securities market in the recent past; to suggest measures to strengthen investor awareness; to investigate whether there has been a regulatory failure in dealing with the alleged contravention of laws about the securities market concerning the Adani Group or other companies, the bench noted.
- The Committee will also suggest measures to strengthen the statutory and/or regulatory framework and secure compliance with the existing framework for the protection of investors, the order added.
- The Bench said besides its ongoing investigation, Sebi shall probe whether there had been a violation of Rule 19A of the Securities Contracts (Regulation) Rules 1957; whether there had been a failure to disclose to Sebi the transactions with related parties and other relevant information that concerned related entities; and whether there was any manipulation of stock prices in contravention of existing laws.
- Rule 19A of the Securities Contracts (Regulation) Rules, 1957, talks about the maintenance of minimum public shareholding and its attainment within a specified period.
