Adani: Court panel said – conflict of interest, another committee should be formed – Adani Hindenburg case: Allegation of conflict of interest in court panel, demand for new committee
After the report of American short seller Hindenburg Research, questions have been raised through a petition on the Supreme Court panel to investigate the allegations against Adani Group. There has been a demand that the Supreme Court appoint a new investigation panel. According to India Today and other media reports, there is a conflict of interest between the panel members and the Adani Group. The issue of conflict of interest was also raised during the investigation by market regulator SEBI against Adani Group. Conflict of interest means that the panel members may have been associated with the Adani Group in some way or the other in the past or present.
The Supreme Court expert inquiry panel includes industrialist OP Bhatt, Justice JP Deodhar, banker KV Kamath, Infosys co-founder Nandan Nilekani and lawyer Somashekhar Sundaresan. Its chairman is former Supreme Court judge Justice AM Sapre.
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According to India Today, the petition states that panel member industrialist OP Bhatt is the chairman of Greenco Group and works closely with Gautam Adani. Similarly, banker KV Kamath is facing a bank fraud case. Kamath has also been the chairman of ICICI Bank. Advocate Somasekaran has appeared on behalf of Adani Group in various courts. Thus, the present panel will fail to instill confidence in the people of the country in this matter.
The petition requests the court to have a new panel investigate the matter. People having knowledge of finance, law and stock market should be included in the new panel. It is being said that the Supreme Court can hear this petition on October 13.
According to India Today, the issue of conflict of interest had also arisen in the matter of SEBI investigation. An affidavit filed in the Supreme Court last week alleged that a SEBI member has family ties with the Adani Group. In such a situation, SEBI’s investigation cannot be neutral. This is a clear case of conflict of interest.
Petitioner Anamika Jaiswal had said in her affidavit, “There is a clear conflict of interest between the SEBI investigation and the Adani Group as the daughter of SEBI’s Cyril Shroff is married to Karan Adani, son of Adani Group Chairman Gautam Adani.
What is in the Hindenburg Report?
Hindenburg Research alleged in a report in January 2023 that its two-year investigation found the Adani Group engaged in stock manipulation and accounting fraud. Hindenburg raised questions on the loans taken by Adani Group from government banks, saying that Adani Group even mortgaged the shares of government banks for the loan. Adani’s Dubai-based brother was also targeted. Adani Group rejected the allegations. Adani Group said that out of 88 questions raised by Hindenburg, 65 matters relate to Adani portfolio companies, which have already duly disclosed their respective portfolios. Of the remaining 23 questions, 18 are related to public shareholders and third parties (which are not Adani portfolio companies), while the remaining 5 questions are on hypothetical facts, there is a pattern visible in them and all the allegations are baseless.
After this report came out, Adani Group had suffered a loss of more than USD 50 billion in the stock market in just two trading sessions. After this, Gautam Adani kept falling down from third place in the list of the world’s richest people.
Hindenburg’s answer
On the Adani Group’s clarification, Hindenburg Research responded that the fraud cannot be explained away by nationalism or a conservative response. Adani Group has basically ignored every major allegation raised. Hindenburg said, Adani’s ‘413 page’ response contained only 30 pages focused on issues related to our report. … We note that the main allegations in our report relate to a number of questionable transactions with shell companies. The answers to those questions remain completely unresolved.
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Hindenburg Research had challenged Adani Group to sue in this matter in the USA. Adani Group has not yet accepted that challenge. He had said that the Adani Group tried to divert attention from the core issues and instead fueled the nationalist narrative.
However, the opposition tried to corner the government on the allegations against Adani Group. Congress leader Rahul Gandhi launched a direct attack linking the interests of Adani Group with Prime Minister Modi. He asked questions inside and outside the Parliament on Adani Group and its relations with Modi. What Rahul Gandhi said against Adani in Parliament was removed from the parliamentary proceedings.
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Meanwhile, the case proceedings against Congress MP from Wayanad Rahul Gandhi on the basis of one of his old statements started again in Surat Court. Surat court declared Rahul Gandhi guilty. As soon as he was declared guilty, Rahul Gandhi’s Lok Sabha membership was immediately suspended. Rahul remained out of Parliament for several months. After this he approached the Supreme Court, the Supreme Court did not say that the decision of the Surat Court was correct. After this, Rahul’s Lok Sabha membership was restored.
