SC VERDICT ON HINDENBURG ISSUE Syllabus GS Paper 3 – Economy)

News-CRUX-10     4th January 2024        
output themes

Context: The Supreme Court recently directed SEBI and investigating agencies to probe Hindenburg Research's conduct in the Adani Group's case, emphasizing potential legal violations and urging suitable action for losses suffered by Indian investors.

Adani-Hindenburg Issue

  • Hindenburg Research has alleged that the Adani Group was “engaged in a stock manipulation and accounting fraud”. 
  • The Adani Group has interests in varied sectors such as ports and logistics, power generation, agribusiness, real estate, defence, solar energy, financial services, natural resources, and media.
  • The research firm alleges that the Adani group has engaged in ₹17.8 trillion (US$ 218 billion) brazen stock manipulation and accounting fraud schemes over the course of decades.


Securities and Exchange Board of India (SEBI)

  • Establishment: As a statutory body in the year 1992.
  • Headquarters: Mumbai, Maharashtra
  • Ministry: Ministry of Finance
  • Aim: To protect the interests of investors in securities and to promote the development of, and regulate the securities market.
  • Power and Functions

oThe Securities Laws (Amendment) Act, 2014 empowers SEBI to oversee money pooling arrangements exceeding Rs. 100 crore, allowing the authority to seize assets in cases of noncompliance.

oThe SEBI Chairman holds the authority to authorize "search and seizure operations," and the SEBI board can request information, including telephone call data records, related to securities transactions under investigation.

oSEBI is entrusted with the registration and regulation of venture capital funds and collective investment plans, which include mutual funds.

oSEBI's mandate extends to promoting and regulating self-regulatory bodies while also striving to eliminate fraudulent and unfair trading activities in the securities markets.

o

output themes