"JPC Demand Only To Embarrass Centre": Harish Salve On Adani-Hindenburg Row

The demands by some opposition parties to let a joint parliamentary committee investigate the Adani group-Hindenburg Research row "is only to embarrass the government", senior lawyer Harish Salve told NDTV today.

He said the Supreme Court's order to set up a committee comprising six experts is a much better option and their investigation should be time-bound as it involves investors' trust.

"It is critical (this investigation is time-bound) because investors' confidence is fragile. Today, whether true or false, investor sentiment has been damaged by such occurrences of market volatility and to build it back we need to know quickly what exactly happened," Mr Salve told NDTV.

The Supreme Court yesterday set up a six-member committee of experts to look into issues arising out of the Adani group firms' stock crash triggered by US short seller Hindenburg's allegations.

Mr Salve, welcoming the formation of the committee, said the Adani-Hindenburg row involves some complex financial matters that only subject matter experts can handle.

"The JPC (joint parliamentary committee) consists of MPs who are very wise people. Here, what has happened is in an area - a very specialised field. What has happened here is there are allegations made on structuring of companies, allegations made about how shares have been issued, how shares have been overvalued, how the market has been played," Mr Salve said.

"This is a very specialised field. Justice Sapre brings an experience - he has been a commercial lawyer, we have worked together... He was in the SAT (Securities Appellate Tribunal). So is Somasekharan Sundaresan. He knows the subject. He knows this law better than most lawyers do. He can teach me this law. He is that good," Mr Salve said, referring to the composition of the six-member committee - former Supreme Court judge Justice AM Sapre, former SBI chairman OP Bhat, retired Bombay High Court judge Justice JP Devadhar, former Infosys chairman KV Kamat, Infosys co-founder Nandan Nilekani and lawyer Somasekharan Sundaresan, who is also a securities and regulatory expert.

"People like them will look at what is going on in the market and what exactly has happened and you will have that report. And after that, if the report convinces you that there has been a political cover-up, then you should demand action in parliament, debate in parliament, joint parliamentary committee (JPC). Today, the demand for a JPC is only to embarrass the government and the noises will become more shrill as 2024 comes closer," Mr Salve said, referring to the national election scheduled next year.

"There are two things - one is the allegations made by the Hindenburg report. They may be right, they may be wrong - Adani is my client, you know that - we will defend the allegations etc, but there is a completely different dimension to this. Hindenburg is no Good Samaritan who has exposed wrongdoings. They have timed the report, they have dropped the report, they do it for shorting," Mr Salve said.

"It is my suggestion and I have said so publicly, and I am repeating that the committee must find all those who have made tonnes of money at the cost of the middle class investor by shorting shares. Treat that as market manipulation and get them to disgorge and ban them from trading," the senior lawyer told NDTV.

"India is new to this game. We are growing our capital markets. If the middle class investor is petrified that every time he invests in a company, tomorrow there's a Hindenburg report, by the time it is proved to be false it's too late. The shares have tanked anyway," Mr Salve said, adding India must have some institutional mechanism to hold to account people who are systematically making money off the misfortune of the middle class shareholders.

Even among opposition parties, there is difference of opinion on the new committee. The Congress and its allies want a JPC, with its leader Rahul Gandhi singularly focussing on this issue. Tamil Nadu's DMK, too, has echoed the Congress demand.

The Trinamool Congress, however, welcomed the Supreme Court's decision and said it would not insist on a JPC. The Trinamool is not alone. Former Maharashtra Chief Minister Uddhav Thackeray, and Delhi's ruling Aam Aadmi Party have also welcomed the court's decision, leaving the Congress and a few of its allies isolated.