Supreme Court upholds SEBI probe, turns focus on ‘conduct’ of Hindenburg

Syllabus: GS-II

Subject: Governance

Topic: Statutory, Regulatory and various Quasi-judicial Bodies.

Issue: SEBI.

Context: Supreme Court judgement on petitions to transfer investigations related to Adani from SEBI to SIT.


  • The Adani Group, facing allegations from U.S. short-seller Hindenburg Research, has been relieved by the Supreme Court, ruling out the need for additional investigation.
  • Hindenburg accused Adani of improper business dealings and tax haven use, causing a $150 billion selloff, but Adani denied the allegations.
  • Adani’s shares, though still below pre-allegation levels, have recovered partially, thanks to investor confidence and strategic partnerships.
  • The Securities and Exchange Board of India (SEBI) is instructed by the court to conclude its investigation within three months.
  • Gautam Adani views the ruling as a victory for truth, while analysts predict increased confidence for global investors in Adani Group shares.
Hindenburg Research :·          Founded in 2017 by Nathan Anderson. It is a forensic financial research firm that analyses equity, credit and derivatives.

·          It has a track record of finding corporate wrongdoings and placing bets against the companies.


·          Hindenburg disclosed last year it held short positions in Adani companies through U.S.-traded bonds and non-Indian-traded                     derivatives.

·          It released a report that alleged Adani improperly used tax havens and also flagged concerns about high debt levels at the                             company.

SEBI (Securities and Exchange Board of India)

•     constituted as a non-statutory body in 1988.

•     established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992

•     Objective: to protect the interests of investors in securities and to promote the development of, and to regulate the securities market

•     SEBI has three powers rolled into one body:

  • quasi-legislative- drafts regulations in its legislative capacity,
  • quasi-judicial- passes rulings and orders in its judicial capacity
  • quasi-executive- conducts investigation and enforcement action.
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