New Delhi, Feb 17: The Central government has told the Supreme Court that the "truthfulness" of the allegations levelled by a US short seller against the Adani Group should be examined and a fact-finding exercise is required to be undertaken as a one-time measure and without making it a precedent.
In a note submitted in the apex court, the Central government supported the formation of a committee to probe the allegations made in the Hindenburg report.
The government said in view of the unprecedented financial loss suffered by the investors and in view of the complexities involved in the subject which requires urgent consideration, a fact-finding exercise requires to be undertaken as a one-time measure and a committee can be constituted with a former judge of the Supreme Court as its head.
The Centre proposed the committee could include the Secretary in the Ministry of Home Affairs, and the Director of the Enforcement Directorate.
"The committee shall have all the powers to undertake an effective investigation with all powers which are available under the relevant legislations regulations/rules, including every authority and power to avail all assistance and protocols for its investigation outside India," said the note.
It added that this committee should have no reflection either on the ability or competence of Sebi and all other statutory agencies, and it should submit a report within a period of eight weeks.
The Centre said the committee should submit a report "regarding the truthfulness or otherwise of the allegations levelled against Adani group of companies in the Hindenburg report".
The note added, "To ascertain and submit a report regarding Hindenburg's admitted claim of taking a 'short position in Adani Group companies through US traded bonds and non-Indian traded derivatives instruments' prior to the publication of its subject report with all underlying transactions undertaken/made either by Hindenburg itself, its associated companies/concerns and/or connected entities/individuals, whether within or outside India in violation of any regulatory/penal/preventive or other statutory provisions."
It added that the committee should ascertain and submit a report regarding the details of all undisclosed "short positions" and/or other transactions, source of funds and profits made by short sellers in India or abroad prior to and/or in near proximity of the Hindenburg report.
"Suggest measures to strengthen investor awareness including at the point of trade. Suggest measures to strengthen statutory and/or regulatory framework for further and better protection of investors," added the note.
The Supreme Court is yet to issue an order on setting up of a panel proposed to examine investor protection mechanisms against the backdrop of the Hindenburg report.