NEW DELHI: The Union government on Monday agreed before the Supreme Court that a committee may be formed to examine the existing regime and regulator's role in preventing massive loss to investors as seen after Hindenburg Research report on Adani Enterprise.
Solicitor General Tushar Mehta submitted before a bench of Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala that the government may be allowed to suggest the names and remit of the committee, which should primarily comprise of domain experts.
Without undermining the existing regulatory regime, the committee may be formed, he said, while adding the SEBI was fully equipped to deal with the situation
However, Mehta added that there should not be a message to the foreign investors that the committee was presiding over the regulatory regime.
The court asked the Centre to submit a note on the proposed terms of reference by Wednesday, and fixed the matter for further hearing on Friday, February 17.
The court was hearing PILs filed by advocates Vishal Tiwari and Manohar Lal Sharma seeking a direction to probe the alleged conspiracy behind the US short selling firm's Hindenburg report.
On February 10, the top court indicated to the Solicitor General, the concerns over the loss of investor wealth in the securities’ market over the past several weeks and the portents for the future.
"There is a need to review existing regulatory mechanisms in the financial sector to ensure that they are duly strengthened. These regulatory mechanisms must be robust enough to protect Indian investors against volatility of the kind which has been witnessed in the recent past. An assessment has to be made of the regulatory framework, relevant causal factors and the mechanisms necessary for the stable operation and development of the securities market," the bench had said in its order.
"We have suggested to the Solicitor General that he may seek instructions on whether the Government of India would facilitate the constitution of an expert committee for an overall assessment of the situation, and if so, to place its suggestions on the constitution and remit of the committee on the next date," the court had said.