SEBI's response to the Expert Committee's recommendations in the Hindenburg-Adani case has been submitted to the Supreme Court. The regulatory body asserts that it has effectively dealt with the concerns raised by the committee, refuting allegations of a significant increase in securities violations. SEBI's stance contradicts the claims made by the committee, bringing attention to the ongoing controversy surrounding the Adani group.

SEBI's response to the recommendations has been comprehensive. It highlighted that an effective enforcement policy is already in place, supported by an enforcement manual and internal guidelines for case selection. The regulatory body also stated that proceedings initiated by SEBI have not seen a significant increase in recent years, as suggested by the Expert Committee. SEBI explained that the surge in the number of cases in the mentioned period was primarily due to an increase in proceedings against Illiquid Stock Options (ISO) matters, which were previously dealt with in a limited number of cases.

Regarding judicial discipline, SEBI emphasized that it comprises independent authorities and follows the ratios laid down in previous cases by Adjudicating Officers (AO) or Whole Time Members (WTM), except in cases of disagreement. The board argued that securities law violations require prompt action to limit negative consequences in the market, and delaying such action, as observed in tax law, could have serious ramifications.

SEBI also addressed concerns related to its settlement policy, stating that robust regulations are already in place, defining grounds for rejection of settlement proposals with wide market impact or affecting a large number of investors. It contested the Expert Committee's claim that settlement proposals have declined in recent years, stating that when the ISO cases are excluded, the percentage of settlement applications received in 2021-22 was higher than the previous year.

The regulatory body expressed reservations about prescribing specific timelines for inquiries and proceedings, stating that each case's nature, scope, and complexity should be considered to ensure thorough investigations and maintain efficiency. It also highlighted the existing measures in place to minimize human intervention and bias in surveillance and market administration, such as Additional Surveillance Measures (ASM) and Graded Surveillance Measures (GSM).

SEBI emphasized that it has adequate mechanisms to ring-fence quasi-judicial functions, ensuring separate departments for legislative, executive, and quasi-judicial functions. It stated that investigating and quasi-judicial authorities are different, and adequate checks and balances are in place to prevent interference or bias.

Contrary to public perception, SEBI clarified that it has not given a clean chit to the Adani group, as highlighted by the petitioner in the case. The Expert Committee's findings indicated regulatory failures and raised suspicions of legal violations by the conglomerate. The petitioner urged the Supreme Court to direct SEBI to conduct further investigations.

The matter surrounding the Hindenburg-Adani case has garnered significant attention due to the allegations of fraud and share price manipulation made against the Adani group. The SEBI's response to the Expert Committee's recommendations seeks to address the concerns raised and emphasizes the steps already taken by the regulatory body in this high-profile case.

Vishal Tiwari v. Union of India: The Hindenburg-Adani Case in Supreme Court