Appearing for the Centre, Solicitor General Tushar Mehta told the Supreme Court that though the government is of the opinion that existing regime, regulators and agencies are fully competent to deal with such situations, it would not oppose the SC’s suggestion for a expert committee to go into strengthening of the existing regime.
Last week, the apex court had asked the Union government and market regulator Sebi to respond by Monday the steps needed to improve the regulatory and statutory mechanisms to “ring-fence” investors against volatility of the kind that singed Adani Group shares, triggered by short-seller Hindenburg Research. It had also asked whether an expert panel led by a retired judge could be set up for a holistic review.
The government has now agreed to give names to domain experts for the proposed panel on regulatory mechanism in sealed envelope to the Supreme Court.
Meanwhile, the shares of Adani Group companies continued their downward trend on Monday as well following reports of a cut down in growth trajectory.
Led by billionaire businessman Gautam Adani, the group’s seven listed stocks have lost about $120 billion in market value since a January 24 report by US short-seller Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation, allegations the company has denied.
The fallout has sparked worries of financial contagion in India, protests in parliament where lawmakers have demanded an investigation, ratings outlook downgrades of some Adani units and cast a shadow on the company’s capital raising plans. Gautam Adani has also lost his crown as Asia’s richest person.
The Securities and Exchange Board of India (Sebi) has been probing the group’s market rout, including examining trade patterns and any potential irregularities in the $2.5 billion share sale of flagship company Adani Enterprises that Adani group was forced to cancel due to the stock’s plunge, according to a Reuters report.