SC JUDGEMENT ON ADANI HINDENBERG ISSUE

Question 1

What is the Adani Hindenberg Case about?

Answer 1

It involves accusations by Hindenberg Research against the Adani Group of manipulating stocks and engaging in accounting fraud

Question 2

What did the SC decide about the investigation in this case?

Answer 2

SC ruled that there is no need to transfer the SEBI investigation to a Special Investigation Team (SIT)

Question 3

What is the status of SEBI’s investigation according to the SC?

Answer 3

SEBI has completed 20 out of 22 investigations and has been directed to finish the remaining two within three months.

Question 4

What did the SC say about the Organized Crime and Corruption Reporting Project (OCCRP) report?

Answer 4

SC rejected the OCCRP report as a proof to question the SEBI investigation

Question 5

Short Selling

Answer 5

trading strategy where investors bet on the stock price of a company going down on earning profits

Question 6

What did the SC direct SEBI and the government to do regarding the Hindenburg report?

Answer 6

They were directed to investigate if the report on short selling violates any laws and take appropriate legal action if required.

Question 7

Did the SC find SEBI’s actions questionable?

Answer 7

No, the SC stated that SEBI had done a good job, and there was no evidence of wrongdoing on their part.

Question 8

What is the significance of the SC’s order?

Answer 8

It upholds SEBI’s ongoing investigation while ensuring transparency, efficiency, and legality in the process.

Question 9

timeline given by the SC for completing the investigation?

Answer 9

SEBI has been given three months to complete the investigation.

Question 10

When did the allegations by Hindenburg Research against the Adani Group surface?

Answer 10

The claims were made in January 2023.

Question 11

Formation of Justice Sapre Committee

Answer 11

by SC, March 2, 2023 to investigate casual factors and regulatory failure in the securities market.

Question 12

What did the Justice Sapre Committee report conclude about SEBI?

Answer 12

The report found evidence of regulatory failure by SEBI in managing market volatility.

Question 13

What is the difference between naked and covered short selling?

Answer 13

Naked short selling: Selling shares without owning or borrowing them.
Covered short selling: Selling shares after arranging to borrow them.

Question 14

Is naked short selling allowed in India?

Answer 14

No, naked short selling is prohibited in India and the USA.

Question 15

How many listed companies in India are eligible for short selling?

Answer 15

Only stocks of 183 out of more than 2,000 listed companies are eligible for short selling.

Question 16

What is SEBI, and when was it established?

Answer 16

SEBI is the Securities and Exchange Board of India, established in 1988 as a non-statutory body and given statutory powers in 1992 under the SEBI Act.

Question 17

What does SEBI regulate?

Answer 17

SEBI regulates the securities and commodity markets in India under the Ministry of Finance.

Question 18

Who is the current chairperson of SEBI?

Answer 18

Madhabi Puri Buch.

Question 19

Where is SEBI headquartered?

Answer 19

Mumbai, with regional offices in Ahmedabad, Kolkata, Chennai, and Delhi.

Question 20

What amendments did SEBI recently make about short selling?

Answer 20

Institutional investors must disclose upfront if their order involves short selling.
Retail traders must disclose short trades by the end of the trading session.

Question 21

What is the structure of SEBI’s governing body?

Answer 21

One chairman (nominated by the Union Government of India).
Two members (from the Union Finance Ministry).
One member (from RBI).
Five members (nominated by the Union Government, at least three whole-time).

Question 22

What is Hindenburg Research LLC?

Answer 22

A U.S. investment research firm specializing in activist short-selling, founded by Nathan Anderson in 2017.

Question 23

Why is Hindenburg named after the 1937 disaster?

Answer 23

To symbolize avoidable human-made disasters, reflecting their focus on uncovering corporate fraud.