Hindenburg report on Adani: The Supreme Court rejects a request to ban the media from publishing

The Supreme Court will never prohibit the media from reporting on a matter, Chief Justice of India (CJI) Dhananjaya Y Chandrachud said on Friday, as a plea was filed to prevent reporting on the Adani-Hinderburg episode until the court issues its order on the formation of a panel to investigate the matter.

“We will never issue an injunction against the media. We will do what needs to be done. “We will issue our order,” the CJI informed attorney ML Sharma, who is one of the petitioners in the case and has questioned market regulator SEBI’s failure to restrict trade in Adani Group shares following the publication of the Hinderburg report.

Sharma highlighted stories published by media organisations routinely even while a bench, led by the CJI, is seized of the problem and is yet to create a committee to probe it. “Such reports influence thousands of investors and ordinary people. Please keep the journalists at bay until this court issues its decision,” Sharma remarked.

“We have already reserved the order, and we will pronounce it,” the CJI remarked. Please offer a logical argument, Mr Sharma. We will not issue injunctions or gag orders to the media.”

On February 17, the CJI-led bench reserved its decision on the membership and scope of a committee that will investigate the case.

Adani stock prices fell after a report by short-seller Hindenburg Research accused the company of fraud and stock manipulation.

On February 17, the court also rejected the government’s “sealed cover” nominations for the committee, stating that the court will form its own panel. It emphasised the process must inspire transparency and confidence without an image being created of the committee being “government-appointed”.

The government filed a letter in court through solicitor general Tushar Mehta requesting that the proposed panel be charged with the principal responsibility of determining the veracity of the claims made against the Adani Group in the Hindenburg report.

The investigation, according to the note, should also focus on Hindenburg’s admitted position of acquiring a “short position” in the Adani Group, as well as gather details of all transactions undertaken by it and its linked companies, in addition to exploring ways to strengthen India’s statutory and regulatory framework.

In a sealed cover envelope, the letter also offered a few names for the proposed panel.

The Adani Group was accused of “brazen accounting fraud” and “stock manipulation” in Hindenburg’s report, which was released on January 24.

The report was deemed “unresearched” and “maliciously mischievous” by the company. The revelation caused a major sell-off in Adani Group shares. Adani’s flagship company lost almost $120 billion in a matter of days, forcing the cancellation of a 20,000 crore secondary share sale that had previously passed muster.

Four public interest lawsuits have been filed in the Supreme Court, requesting an investigation of the Hindenburg report, the failure of statutory agencies to protect investors, and claims against Adani Group.

The first two petitions in the case, pertaining to the Hindenburg report, were submitted separately by attorneys Visha Tiwari and ML Sharma.

Tiwari’s petition focused on the “monumental damage to investors,” claiming that the report should be scrutinised to determine if a calculated attempt was made to destroy the country’s reputation and impact its economy. The lawyer wanted a court-monitored investigation.

Sharma questioned SEBI’s refusal to halt trading in Adani Group shares shortly after the report was published, and he requested criminal prosecution of the short sellers. His petition accused Hindenburg founder Nathan Anderson and his friends of devising a “criminal conspiracy” by disseminating “concocted news” as a research paper to cause large losses to Adani stockholders.

On February 10, the bench recommended that the government establish a “strong framework” by revising legislation and tightening supervisory oversight in order to protect thousands of investors who have been harmed.

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Hi, my name is Nisha and I'm an educational journalist based in India. I've always been passionate about the power of education to transform lives, and that's what led me to pursue a career in journalism focused on this area. I completed my Bachelor's degree in English from Hindu College in Delhi in 2013 and then went on to earn my Master's in Journalism and Mass Communication from the Indian Institute of Mass Communication in 2017. During my studies, I also completed several short-term courses on Education in India, Sociology, and other related subjects to deepen my knowledge in this field. I'm particularly interested in improving access to quality education in rural areas, where students often face significant challenges. I've worked on a number of initiatives to address this issue, including advocating for better policies, resources, and practices that can make a difference. As an educational journalist, I'm passionate about using my platform to highlight important issues in the education space. I've covered a wide range of topics, including the impact of technology in the classroom, innovative approaches to teaching and learning, and the challenges facing students from marginalized communities. One of the things I love most about my work is the opportunity to constantly learn and grow. I'm an avid reader and believe that reading is key to expanding one's knowledge and perspective. I'm always seeking out new ideas and insights to help me better understand the world around me. In summary, as an educational journalist, I'm dedicated to using my skills and expertise to make a positive impact in the field of education. I'm committed to improving access to quality education for all students and to using my platform to raise awareness about important issues in this area.

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