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TMI Blog2023 (3) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... kha Raman, Adv. Mr. Abhishek Anand, Adv. M/s KJ John & Co. Mr. Tushar Mehta, SG Mr. Kanu Agarwal, Adv. Mr. Rajat Nair, Adv. Mr. Arvind Kumar Sharma, AOR Mr. Ramesh Babu MR, AOR Ms. Manisha Singh, Adv. Ms. Nisha Sharma, Adv. Ms. Tanya Chowdhary, Adv. Mr. Rohan Srivastava, Adv. Applicant-in-person ORDER 1. Notice. 2. The present batch of petitions concerns the loss of investor wealth in the securities market over the last few weeks because of a steep decline in the share price of the Adani Group of companies. The decline in the share price was precipitated by a report published by Hindenburg Research on 24 January 2023. This report inter alia alleges that the Adani Group of companies has manipulated its share prices; failed to disclose t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than 75% of the shares of public listed Adani group companies, thereby manipulating the price of its shares in the market." It inter alia seeks a court monitored investigation by a Special Investigation Team or by the Central Bureau of Investigation into the allegations of fraud and the role played by top officials of leading public sector banks and other lender institutions; and d. WP(Crl) 57 of 2023 is for directions to any investigative authority to: (i) investigate the Adani Group companies under the supervision of a sitting judge of this Court; and (ii) investigate the role of LIC and SBI in these transactions. 4. In its order dated 10 February 2023, this Court noted that there was a need to review existing regulatory mechanisms i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed the extant framework governing investor protection in the context of the subject matter at hand. It has stated that the key pillars of investor protection are: "11.1 Mandatory disclosures by listed companies to facilitate free and fair price discovery and to ensure that all investors have equal access to material information for them to be able to take informed investment decisions; 11.2 Market systems to ensure seamless trading and settlement including volatility management; 11.3 Enforcement action in the event of misconduct in the market including fraud or violations of SEBI regulations." 7. In Prakash Gupta v. SEBI, 2021 SCC OnLine SC 485 a two Judge Bench of this Court, of which one of us (D.Y. Chandrachud, J) was a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nimum public shareholding in a public limited company. Similarly, there may be various other allegations that SEBI must include in its investigation. 10. As a part of its ongoing investigation, SEBI shall also investigate the following aspects of the issues raised in the present batch of petitions: a. Whether there has been a violation of Rule 19A of the Securities Contracts (Regulation) Rules 1957; b. Whether there has been a failure to disclose transactions with related parties and other relevant information which concerns related parties to SEBI, in accordance with law; and c. Whether there was any manipulation of stock prices in contravention of existing laws. 11. The above directions shall not be construed to limit the contours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pert Committee shall be headed by Justice Abhay Manohar Sapre, a former judge of the Supreme Court of India. 15. The remit of the Committee shall be as follows: a. To provide an overall assessment of the situation including the relevant causal factors which have led to the volatility in the securities market in the recent past; b. To suggest measures to strengthen investor awareness; c. To investigate whether there has been regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies; and d. To suggest measures to (i) strengthen the statutory and/or regulatory framework; and (ii) secure compliance with the existing framework for the protec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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