From Left: Justice AM Sapre, OP Bhatt, Justice JP Devadhar, KV Kamath, Nandan Nilekani and Advocate Somasekhar Sundaresan.
On March 2, the Supreme Court (SC) of India constituted a six-member expert committee to review the regulatory mechanism. The SC’s six-member committee is formed in light of the Adani-Hindenburg issue.
On January 24, the controversial short-seller Hindenburg Research released a report targeting the Adani Group with allegations of stock manipulation, accounting fraud and concerns over the group’s valuation and leverage. Hindenburg’s report caused Adani Group to lose Rs. 4 lakh crore within two days.
The Adani Group has criticised Hindenburg as “an unethical short seller” and stated that the report by the New York-based entity was “nothing but a lie”. Adani Enterprises Limited, the group’s flagship company, cancelled a fully subscribed Rs 20,000 crore follow-on public offer due to the group’s stocks’ ongoing selloffs.
On January 29, Adani Group, in a long 413-page report, said the recent report by Hindenburg Research was not an attack on any specific company but a “calculated attack” on India, its growth story, and ambitions. “This is not merely an unwarranted attack on any specific company but a “calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” it said.
The six-member committee will be headed by Justice AM Sapre (former SC judge) and includes OP Bhatt (former Chairman of State Bank of India), Justice JP Devadhar (former Bombay High Court judge), KV Kamath (former Chairman of Infosys Ltd.), Nandan Nilekani (co-founder of Infosys Ltd.) and Advocate Somasekhar Sundaresan.
The Supreme Court stated, “The remit of the Committee shall be as follows:
Justice Abhay Manohar Sapre, a former SC judge, will be heading the six-member committee. He retired from SC in 2019. Earlier, he served as the Chief Justice of the Gauhati High Court from October 19, 2013, to August 12, 2014, and served as the Chief Justice of the Manipur High Court from March 23, 2013, to October 18, 2013.
Om Prakash Bhatt is the former Chairman of the State Bank of India. He also serves as an independent director on boards of various multinational companies, including an independent non-executive director at Tata Consultancy Services (TCS). He was also the Chairman of the Indian Banks’ Association. In 2018, the Economic Times reported that OP Bhatt and other State Bank of India officials were under the Central Bureau of Investigation’s (CBI) scanner for disbursing loans to Vijay Mallya without conducting due diligence.
Justice JP Devadhar is a former Bombay High Court judge. He was elevated to the Bombay High Court as an Additional Judge on October 12, 2001, and retired on April 8, 2013. He also served as the Chairperson for the Securities Appellate Tribunal (SAT) from July 2013 to July 2018. In 1977, he started his practice with Justice (retd) DR Dhanuka. He served as a counsel for the Union of India since 1982 and as a standing counsel for the Income Tax Department since 1985.
Kundapur Vaman Kamath (KV Kamath) is an accomplished banker, a Padma Bhushan awardee and an IIM Ahmedabad alumnus who started his career at ICICI Bank. He also held coveted positions, including Chief of the New Development Bank of BRICS countries, Chairman of Infosys Ltd, and Chairperson of the National Bank for Financing Infrastructure and Development (NaBFID).
In 2012, KV Kamath said in an interview, “Of all the people I have mentored, Chanda is my favourite. She knows how to manage her priorities. However challenging the assignment, she always delivered. I just had to keep giving her bigger opportunities.” However, mentee Chanda Kochhar and her husband were arrested in the alleged loan fraud case. The mentee Chanda Kochhar allegedly disbursed high-value loans to Videocon in contravention of the ICICI Bank’s lending policies.
Nandan Nilekani co-founded Infosys Ltd and serves as the company’s non-executive chairman since August 2017. He also served as Chairman of the Unique Identification Authority of India (UIDAI) from July 2009 to March 2014, overseeing Aadhar implementation. He is also a Padma Bhushan awardee.
In March 2014, Nandan Nilekani resigned as UIDAI’s Chairman and joined Indian National Congress. He contested the 2014 Lok Sabha elections from Bangalore South; however, he lost to BJP’s Ananth Kumar by a 3.2 lakh-vote margin.
In a 2016 interview with On Think Tanks, Nandan Nilekani’s wife, Rohini Nilekani, said, “There are several I admire and it is hard to pick out one. Certainly, George Soros’ work with the Open Society Foundations, some aspects of the Bill and Melinda Gates Foundation, many of the early work of Ford Foundation, many other smaller groups that are doing small but important work and there are lessons to be taken form there also.” It is pertinent to note, that recently George Soros expressed hope for Narendra Modi’s downfall in light of Adani-Hindenburg issue and hoped for a “democratic revival” of India.
Advocate Somasekhar Sundaresan is a prominent lawyer who started his career as a journalist. He has expertise in securities law, mergers and acquisitions and corporate governance.
The Supreme Court collegium recommended his appointment as a judge at the Bombay High Court; however, the Government of India objected to his elevation. He is also an Oxfam India board member, an organisation under the Income Tax Department’s radar for alleged financial fraud.
Supreme Court on Government’s Suggestions
Earlier, the SC rejected the Government of India’s proposals to submit suggestions for the expert committee members. The SC said, “We must not accept a sealed cover suggestions from the government. We want to ensure full transparency. It (accepting sealed cover) may give the impression that it is a government-appointed committee that has been accepted by the SC. We will appoint a committee of our own, will instil confidence.”
Supreme Court’s Directions to SEBI
SC has also directed SEBI to investigate whether there has been a violation of Section 19 of SEBI rules or any manipulation of stock prices. The SC said, “The Chairperson of the Securities and Exchange Board of India is requested to ensure that all requisite information is provided to the Committee. All agencies of the Union Government including agencies connected with financial regulation, fiscal agencies and law enforcement agencies shall co-operate with the Committee. The Committee is at liberty to seek recourse to external experts in its work.”
The SC concluded, “The Committee is requested to furnish its report in sealed cover to this Court within two months.”
Leave a Comment