Hindenburg report on Adani: SC rejects plea for preventing media from reporting

The Supreme Court is not going to ever injunct media from reporting a matter, Chief Justice of India (CJI) Dhananjaya Y Chandrachud observed on Friday as a plea was moved to prevent reporting on the Adani-Hinderburg episode until the court delivers its order on the constitution of a panel to look into the issue.

“We are not going to ever give any injunction against media. We will do what we have to do. We will pronounce our order,” the CJI told advocate ML Sharma, who is one of the petitioners in the case and has questioned market regulator SEBI’s failure in suspending trading of Adani Group shares after the Hinderburg report came out.

Sharma cited reports published by media organisations routinely even as a bench, led by the CJI, is seized of the matter and is yet to form a committee to examine it. “Such reports are affecting lakhs of investors and innocent people. Please, restrain media until this court delivers the order,” Sharma said.

But the CJI said: “We have already reserved the order and we will pronounce it. Mr Sharma, please make a statable argument. We are not going to injunct or gag media.”

On February 17, the CJI-led bench reserved its order on the composition and remit of a committee, which is expected to look into the matter.

Adani stock prices lost value after short-seller Hindenburg Research’s report alleged fraud and stock manipulation by the group.

The bench on February 17 also turned down the government’s “sealed cover” nominees for the committee, saying the court will instead have its own panel. It noted the process must inspire transparency and confidence without an impression being given of the committee being “government-appointed”.

The government submitted a note in the court through solicitor general Tushar Mehta suggesting the proposed panel should be entrusted with the primary task of ascertaining the truthfulness of allegations against the Adani Group in the Hindenburg report.

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

The note also submitted a few names for the proposed panel in a sealed cover envelope.

Hindenburg’s report was released on January 24 and claimed “brazen accounting fraud” and “stock manipulation” by the Adani Group.

The conglomerate rejected the report as “unresearched” and “maliciously mischievous”. The report triggered a massive rout of Adani Group stocks. Adani’s flagship firm lost over $120 billion in days and forced the cancellation of a ₹20,000 crore secondary share sale after it had scraped through.

The top court is seized of four public interest litigations demanding a probe into the Hindenburg report, the lapse of statutory authorities in protecting investors, and allegations against Adani Group.

The first two petitions in the matter were filed separately by advocates Visha Tiwari and ML Sharma related to the Hindenburg report.

Tiwari’s plea focused on the “monumental loss to investors” and claimed the report needs to be investigated to ascertain if a calculated attempt was made to tarnish the country’s image and impact its economy. The lawyer demanded a court-monitored probe.

Sharma questioned SEBI’s failure in suspending trading of Adani Group shares soon after the report came out and demanded criminal prosecution of the short sellers. His petition named Hindenburg founder Nathan Anderson and his associates as short sellers, whom it accused of hatching a “criminal conspiracy” by releasing a “concocted news” as a research report to cause heavy losses to the shareholders of Adani stocks.

On February 10, the bench suggested the government put in place a “robust framework” by amending laws and strengthening supervisory control to protect thousands of investors who have been hit.