Plea In Supreme Court Demands SEBI And Union Government Report On Post-2024 Lok Sabha Polls Stock Market Crash

Plea In Supreme Court Demands SEBI And Union Government Report On Post-2024 Lok Sabha Polls Stock Market Crash

An application has been filed in the Supreme Court seeking directives for the Central Government and the Securities and Exchange Board of India (SEBI) to present a detailed status report on the stock market crash and investor losses following the 2024 Lok Sabha election results. The case, titled Vishal Tiwari v. Union of India and Others, has been integrated into the ongoing Adani-Hindenburg litigation before the apex court.

The Adani-Hindenburg case, already under the Supreme Court's scrutiny, gained prominence after allegations from Hindenburg Research led to significant market volatility and investor losses in Indian securities.

On January 3, the Supreme Court instructed SEBI and central government investigative agencies to examine potential legal violations by Hindenburg Research. This decision followed the Court's determination that it need not take immediate action regarding Hindenburg’s allegations of stock manipulation against the Adani group.

Additionally, the Court directed SEBI and the government to evaluate the recommendations from an expert committee previously appointed. This committee had proposed measures to enhance the regulatory framework, aiming to safeguard investor interests in light of the alleged market manipulations.

"SEBI and the investigative agencies of the Union Government shall also inquire into whether there was any infraction of law by the entities that engaged in short-selling on this occasion. The loss that 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.

The latest plea has argued that it is unclear whether SEBI has completed the pending investigation in compliance with the court's order and has submitted any record to the court.

"The right to know of the 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 the 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 said.

The application also emphasized the ambiguity surrounding whether the government has taken into account the recommendations made by the expert committee. In addition, it highlighted the recent stock market crash that followed the conclusion of the 2024 Lok Sabha Elections.

"It is said that after announcements of exit polls with respect to the Lok Sabha 2024 results, the share market went high, but when the actual results were announced, it resulted in the crash of the share market. So again, it has raised the question of whether the Regulatory Authority and Mechanism have failed again and whether the mechanism remains unstrengthened after having an example of the 2023 share market crash. Whether again some manipulations were made after the exit polls came," the plea argued.

The plea seeks directions for SEBI to present the investigation report on the Adani-Hindenburg issue as per the Supreme Court’s instructions from January 3. Additionally, it requests that both the Union Government and SEBI provide a comprehensive report on the stock market crash and investor losses following the 2024 Lok Sabha election results.