Adani row: Centre agrees before SC to form experts committee to protect investors

The Supreme Court, on Friday, had said interests of Indian investors need to be safeguarded against market volatility

The Union government on Monday told the Supreme Court that it was agreeable to form a committee to examine the existing regime and regulator's role in preventing massive loss to investors as witnessed after the Hindenburg Research report on Adani's companies.

Solicitor General Tushar Mehta submitted before a bench of Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala that the government may be allowed to suggest the names and remit of the committee, which should primarily comprise of domain experts and men of calibre.

Without undermining the existing regulatory regime, the committee may be formed, he said, while adding the SEBI was fully equipped to deal with the situation.

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However, Mehta added that there should not be an "unintentional" message to the foreign investors that the committee was monitoring the regulatory regime.

"SEBI and other agencies are fully equipped not only regime-wise but otherwise also to take care of the situation. However, responding to the suggestion (by the court on February 10), the government has no objection to constituting a committee," Mehta said.

The court asked the Centre to submit a note on the proposed terms of reference by Wednesday and fixed the matter for further hearing on Friday, February 17.

The court was dealing with PILs filed by advocates Vishal Tiwari and Manohar Lal Sharma seeking a direction to probe the alleged conspiracy behind the US short-selling firm's Hindenburg report, which resulted in over $100 billion losses to Gautam Adani's companies and pushed him down on the global rich list.

On February 10, the top court expressed concerns over the loss of investor wealth in the securities market over the past several weeks and the portents for the future.

"There is a need to review existing regulatory mechanisms in the financial sector to ensure that they are duly strengthened. These regulatory mechanisms must be robust enough to protect Indian investors against volatility of the kind which has been witnessed in the recent past. An assessment has to be made of the regulatory framework, relevant causal factors and the mechanisms necessary for the stable operation and development of the securities market," the bench had said in its written order.

"We have suggested to the Solicitor General that he may seek instructions on whether the Government of India would facilitate the constitution of an expert committee for an overall assessment of the situation, and if so, to place its suggestions on the constitution and remit of the committee," the court had said.