Why Opposition is sceptical of SC-led panel to probe Adani row

The Supreme Court, on Thursday (March 2), formed a five-member expert committee headed by its former judge, Justice A.M Sapre, 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”.

The apex court’s decision comes amid a raging political storm that has engulfed the Narendra Modi government ever since US-based investor research firm Hindenburg Research published a damning report accusing billionaire industrialist Gautam Adani and his companies of “brazen stock manipulation and accounting fraud”.

Also Read: Adani-Hindenburg row: SC forms top panel, asks SEBI to submit report

Since the publication of the Hindenburg Report, the Congress-led Opposition has been demanding that the Centre set up a Joint Parliamentary Committee (JPC) to investigate a wide array of issues concerning the Adani Group and the allegedly preferential treatment it has received from the Modi regime over the past eight and a half years. Some among the Opposition outfits, most notably the Trinamool Congress (TMC) and the Aam Aadmi Party (AAP), have also been demanding a SC-monitored probe against the Adani group.

As such, Thursday’s verdict by a three-judge bench comprising Chief Justice of India, D.Y Chandrachud and Justices P.S Narasimha and J.B Pardiwala should have brought much cheer to the Opposition’s ranks.

The verdict, which comes on a batch of petitions seeking various directions from the apex court on the Adani issue, states that the Securities and Exchange Board of India (SEBI), which is presently investigating the matter, “has not expressly referred to an investigation into the alleged violation of the Securities Contracts (Regulation) Rules 1957, which provide for the maintenance of minimum public shareholding in a public limited company”.

While directing the SEBI to conclude its investigation “within two months” and furnish a status report before it, the apex court has also instructed the market regulator to probe three additional aspects of the case. These include, “(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”.

Also Read: Adani Group secures $3 billion loan from sovereign wealth fund: Report

However, the apex court’s assertion that the expert committee being constituted under Justice (retired) Sapre is merely “for the assessment of the extant regulatory framework and for making recommendations to strengthen it” and not to “divest SEBI of its powers or responsibilities in continuing with its investigation into the recent volatility in the securities market” has left many in the Opposition wary of what the judgment would eventually achieve.

The expert committee, which would include as members former State Bank of India (SBI) chairman O.P. Bhatt, retired Bombay High Court judge Justice J.P. Devadhar, former chief of the New Development Bank of BRIC countries K.V. Kamath, Infosys co-founder Nandan Nilekani and securities expert and lawyer Somasekhar Sundaresan, has been given a limited four-point remit.

The judgment states that the committee will “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” and “suggest measures to strengthen investor awareness”. Additionally, the experts will “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, thereafter, “suggest measures to (i) strengthen the statutory and/or regulatory framework; and (ii) secure compliance with the existing framework for the protection of investors.” The verdict directs the committee to furnish its report “in sealed cover” to the court within two months.

The Congress, which has been relentlessly attacking the Modi government over the Adani issue and has led the Opposition’s calls for a JPC into the matter, is clearly unimpressed with the verdict. Congress communications department chief Jairam Ramesh, who has by now put out 60 questions in the public domain asking Modi to explain various issues linked with the Adani Group and the bounty it has allegedly received from the Centre, said that his party, along with other like-minded Opposition outfits will continue to press for a JPC probe when Parliament reconvenes for the remainder of its budget session later this month.

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Ramesh said that the Congress party had, ever since the Hindenburg Report on the Adani issue was first published, maintained that only a JPC probe would bring out the “whole truth” about the nexus between the Prime Minister and Gautam Adani and that investigations by any other agency, even one monitored by the SC, would have only a “limited scope”.

On Thursday, Ramesh said his party continues to hold the view that “an evaluation of the regulatory and statutory regime by experts is in no manner equivalent to an investigation by a JPC” since an expert committee “however competently staffed, cannot be a substitute for a thorough investigation into the political-corporate nexus that has come to light” with regard to Adani and the Modi regime. “If the Prime Minister and his government are to be held accountable, any committee other than a JPC will be nothing but an exercise in legitimization and exoneration,” Ramesh said.

Though the Trinamool Congress has been demanding a SC-monitored probe, the setting of the expert committee and the terms of reference laid out for it by the apex court have also left some in the party doubtful of the end result. “This is not the sort of SC-monitored probe we wanted; what the court has ordered appears to be merely an academic exercise that will have no influence over the actual investigation. The remit may sound all-encompassing to some but in reality, it will have no real impact on the investigation that SEBI, which itself has much to answer in the Adani case, has been told to conduct… who is going to fix SEBI’s accountability, who is going to look into other issues that are not linked to the markets but to policy manipulations by the government for the benefit of Gautam Adani… this is an eyewash,” a senior Trinamool MP told The Federal.

Many in the Opposition are convinced that the Modi government will use the SC judgment and the ongoing SEBi investigation into the Adani case as an excuse to reject pleas for a parallel JPC probe on grounds that it was the Opposition that had, during the first half of the budget session sought a SC-monitored inquiry on more than one occasion. “The government now has grounds to discredit our demand for a JPC probe as it will claim that by pressing on for such a probe, the Opposition is showing its contempt for the Supreme Court and, by extension, a lack of faith in the process of law. The government will hide behind this judgment to say that the Opposition’s demand is unwarranted and that we are merely disrupting Parliament for our vested interests. This is why several Opposition parties had tried to tell the AAP and the Trinamool to stick to the demand for a JPC instead of adding the option of an SC-monitored probe,” a senior leader from one of the Left Front parties told The Federal.