Concerned over protecting the the interests of Indian investors, the Supreme Court favoured creating a robust mechanism to regulate the stock market and sought views of the Centre and market regulator SEBI on PILs alleging exploitation of innocent investors and artificial crashing of the Adani Group's stock value.
A bench headed by Chief Justice D Y Chandrachud allayed the apprehension and told Solicitor General Tushar Mehta to convey to the officials of the Securities and Exchange Board of India (SEBI) that it was not planning any witch hunt.
The bench, also comprising justices P S Narasimha and J B Pardiwala, sought inputs from the finance ministry and others on various issues, including on making the regulatory mechanism robust to protect the interests of investors in the market where capital flow is seamless in modern times.
This is just an open dialogue. They have brought an issue before the court. What is of concern is how do we ensure the protection of Indian investors? What happened here was short-selling. Probably SEBI is also doing its investigation. Please tell your officers also this is no witch hunt that we are planning to do, it said.
How do we ensure that they are protected? How do we ensure that this does not happen in future? What role do we envisage for SEBI? For example, in a different context, you have circuit breakers,” it said.
The bench suggested forming a committee of domain experts and others, besides putting in place robust practices to protect investors. The court said it was just thinking aloud and not making any observation on the merits of the case as the stock markets usually run on sentiments.
We have indicated to the Solicitor General the concerns with regard to ensuring that the regulatory mechanisms within the country are duly strengthened so as to ensure that Indian investors are protected against certain volatility, the kind of which was witnessed in the recent two weeks, it said in the order.
We have also suggested to the Solicitor General if they (Centre, SEBI and others) are willing to accede to the suggestion for a committee. If the Union of India is inclined to accept the suggestion, necessary submissions can be urged on the constitution of the committee, it said.