Gautam Adani-Hindenburg issue: Supreme Court refuses to accept sealed cover names for expert panel | India Business News – Times of India

NEW DELHI: Discontinuing a much-criticised sealed cover practice it encouraged for decades, the Supreme Court on Friday applied the salutary transparency principle to discard names of experts suggested in a closed envelope by the Centre and said it will pick a panel headed by a retired SC judge and comprising experts for an in-depth probe into all aspects of the Hindenburg report on Adani Group resulting in a dramatic meltdown of the latter’s shares.
A bench of Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala said it will soon pass orders constituting the committee for an expeditious probe into the Hindenburg-Adani issue and revealed that the committee would be empowered to seek assistance of investigating agencies and regulatory bodies to fulfil its mandate.
Appearing for the Centre, solicitor general Tushar Mehta agreed with the court’s view while, significantly, emphasising that the government wants a comprehensive inquiry that should cover all aspects of the row, including the promoters of the group.

Rejecting demands for a sitting SC-judge headed inquiry, CJI Chandrachud said, “The CJI is not going to spare a sitting SC judge to head the committee. Sitting judges can hear the case but not head committees… We will direct all investigating agencies to provide assistance sought for by the committee.”
Mehta said the Centre has nothing to hide and a retired SC judge with knowledge of the securities market should expeditiously conduct a comprehensive inquiry into “truthfulness of the allegations made against Adani Group in the Hindenburg report”.
But in a major reversal of the SC’s decades-old practice relating to sealed cover material given by the government and probe agencies, starting with Bofors case accused Ottavio Quattrocchi’s defreezing of London bank accounts to probes into 2G and coal scams, the CJI-led bench refused to accept names of experts given by the Centre for inclusion in the committee. It also stopped a petitioner’s counsel Prashant Bhushan from suggesting the name of a “retired SC judge with impeccable integrity” to head the committee.
The bench said, “We will not accept sealed cover suggested names from you (the Centre). We will tell you why. In constituting a committee, we want to maintain full transparency. The moment we accept a set of suggestions from you in sealed cover, it would mean that the other side (petitioners) have not seen it. Even if we do not accept your suggestions, they would not know which of your suggestions we accepted and which we have not. Then, there will be an impression that, well, this is a government appointed committee which the SC has accepted, even when we do not accept your suggestions.”

The SG agreed with the SC’s view and did not press for inclusion of any of the suggested names in the committee. The CJI-led bench said, “We want to maintain the fullest transparency in the interest of protecting the interest of investors. So, we will appoint a committee on our own, which might be all together better as that would promote a sense of confidence in the process.”
“But if we have to consider the (Centre’s) suggestions, we have to first disclose them to the other side. Then there will be a sense of transparency and confidence in the process of the court. If you are not in favour of disclosing the suggested names, then trust us to come out with our own names. We will do a little research and come out with the names for the committee,” the bench said.
When the SG said that the court has to keep in mind market sensitivity while taking a decision on the issue in hand, the bench said, “But you yourself have said that the market impact (from the meltdown of Adani shares) is zero. We are not really on that as according to you there was no impact on the market. Actually, irrespective of the statistical data, there cannot be any denial of the fact that investors have lost huge sums of money because of this incident.”
Bhushan raised the issue of Rs 30,000 crore investment by LIC in Adani Group shares and drew a parallel with the Mundhra securities scam, on which MP Feroze Gandhi had in 1957 questioned LIC’s Rs 1.26 crore investment in Calcutta-based Haridas Mundhra’s troubled companies. The Justice M C Chagla inquiry committee report had led to the resignation of the Jawaharlal Nehru government’s finance minister TTK Krishnamachari as it was found that he had pressured LIC into investing in Mundhra companies.
Bhushan said the Adani episode from the Hindenburg report appears to be similar to the Mundhra scam. He said Sebi and other regulatory bodies ignored complaints and completely failed to discharge their duties, which resulted in Adani shares artificially getting priced 40-50 times more than their actual price. The bench said, “We cannot start with a presumption that there was a regulatory failure.”
When he said the judge heading the committee must have impeccable integrity, the SG said no judge needs an integrity certificate from Bhushan. Mehta said, “The Union government’s suggested line of inquiry advocates investigation into all aspects of the Hindenburg report, including promoters of Adani Group.”
However, he asserted that “Sebi and all regulators have discharged their responsibilities and duties diligently. The committee should unearth all aspects so that nothing remains hidden and the SC can have a comprehensive view of all sides.”
Watch Supreme Court calls for ‘transparency’ in Adani case, refuses Centre’s sealed cover submission