An application has been filed before the Supreme Court seeking directives for the Central Government and the Securities and Exchange Board of India (SEBI) to submit a detailed status report on the stock market crash and the resulting investor losses following the announcement of the 2024 Lok Sabha election results [Vishal Tiwari v. Union of India and Others].
This application has been moved within the context of the Adani-Hindenburg case, which is already pending before the Supreme Court.
On January 3, the Supreme Court had instructed SEBI and the Central Government’s investigative agencies to investigate any potential legal violations by US-based shortseller Hindenburg Research, whose actions had caused volatility in the Indian securities market and losses to Indian investors.
The Court had previously determined that there was no need for it to intervene in the stock manipulation allegations raised by Hindenburg Research against the Adani Group.
Additionally, the Court directed SEBI and the government to consider the recommendations of an expert committee it had appointed, which proposed measures to strengthen the regulatory framework to protect investors.
“SEBI and the investigative agencies of the Union Government shall also enquire into whether there was any infraction of law by the entities, which engaged in short-selling on this occasion. The loss which has been sustained by Indian investors as a result of the volatility caused by the short positions taken by Hindenburg Research and any other entities acting in concert with Hindenburg Research should be probed,” the judgment said.
Advocate Vishal Tiwari, who filed the latest plea, argued that it is unclear whether SEBI has completed the pending investigation in compliance with the Court’s order and whether any record has been submitted to the Court.
“The right to know of public and investors who suffered the loss that whether due to some irregularities and violations by any corporate group the Indian stock market crashed after Hindenburg report which caused a big loss to the public money. The result of the investigations made by SEBI in this respect shall be placed on record so that the things may not remain hidden and buried,” the plea stated.
Tiwari’s application also highlighted the recent stock market crash following the 2024 Lok Sabha election results.
“It is said that after announcements of Exit polls in respect to the Lok Sabha 2024 results the Share market went high but when the Actual Results were Announced than it resulted the crash of Share market. So again it has raised question that whether again the Regulatory Authority and Mechanism has failed and still the mechanism remains unstrengthen after having an example of 2023 share market crash. Whether again some manipulations were made after the Exit polls came,” the plea argued.
The plea seeks directives for SEBI to submit the investigation report on the Adani-Hindenburg issue as per the Supreme Court’s directions on January 3.
It also seeks directives for both the Union Government and SEBI to submit a detailed report on the stock market crash and investor losses following the 2024 Lok Sabha election results.
