New Delhi, July 10 (FN Agency) A day before the Supreme Court hearing into the Adani-Hindenburg issue, market regulator Securities and Exchange Board of India (SEBI) on Monday filed a 46-page affidavit in the apex court, placing on record the recommendations from its expert committee and petitioners. SEBI in its report apprised the apex judiciary about the recommendations by the top-court-appointed expert committee which suggested violations of securities laws demand prompt action so as to limit the negative impact on the securities market. The SEBI is also looking for ‘appropriate orders’ from the Supreme Court, the affidavit said. The apex judiciary is scheduled to hear the matter on Tuesday. SEBI said that the expert committee recommended a robust and coherent Settlement Policy whereby financial injury commensurate with the alleged violation may be inflicted on the party and resources need not be expended where a settlement is possible.
SEBI urged the Supreme Court to pass appropriate order taking into consideration the views/ observations of SEBI on the Report of the Expert Committee.Whenever amendments are made to any provision of law, SEBI applies the law prospectively. It is a different case whether a provision of law has been circumvented before the amendment to such law has been made. Even in such cases where there is a case of circumvention, SEBI applies the extant law on circumvention, and does not take enforcement actions based on the amended provisions of law, the report stated.”Even though the market may re-price the stocks of the company based on the past transactions, there is no bar on SEBI to examine any securities laws violations because re-pricing of the stock has happened,” SEBI said. The market regulator also mentioned certain observations made by the board and submitted that of the multiple regulatory approaches to deal with violation of securities laws, one is to expand the definition of a particular clause to address the circumvention.
The other approach to deal with the circumvention is to apply the pre-existing provision which prevents “schemes” and “artifices” to circumvent the regulations, SEBI observed. “In situations where norms for related parties are prescribed, long-standing relationship by itself cannot be deemed to be related parties. However, if a scheme to circumvent regulations is identified, then the presence of long-standing relationship in such a scheme can lend credence to the allegation of violation,” the application read. The affidavit was filed by SEBI in the petitions related to the Hindenburg report. The Supreme Court in its verdict on March 2, had constituted a committee into the Adani-Hindenburg issue supervised by an SC-appointed six-member panel, including O P Bhat, Justice JP Devdhar, K V Kamat, Nandan Nilekani and Somasekhar Sundaresan. It was headed by Justice (Former) Abhay M Sapre. The apex court passed the order after hearing a batch of petitions filed by lawyer Vishal Tiwari, and others seeking SIT probe and/or appropriate orders and directions to the authorities concerned in the sensitive matter.