While asking the Securities and Exchange Board of India (SEBI) what it intends to do in the future to ensure investors don’t lose wealth due to volatility in the stock market or short-selling, the apex court observed it would not be proper for it to set up a special investigation team (SIT) on its own without any material before it.

A bench headed by Chief Justice D Y Chandrachud, which reserved its order on a batch of pleas concerning the Adani-Hindenburg row on allegations of stock price manipulation, said it cannot ask a statutory regulator to take as a “gospel truth” something which was published in the media.

“We don’t have to treat what is set out in the Hindenburg report as ipso facto (automatically) a true state of affairs. That is why we directed the SEBI to investigate. Because for us to accept something which is in the report of an entity, which in not before us and whose veracity we have no means of testing, would really be unfair,” the bench, also comprising justices J B Pardiwala and Manoj Misra, told advocate Prashant Bhushan, who was appearing for one of the petitioners.

Bhushan argued that SEBI’s role in the matter was “suspect” for several reasons because a lot of information was available to the regulator way back in 2014.

“They have completed their investigations. They are saying that is now in their quasi-judicial power. Should they disclose the investigation before they issue a notice to show cause,” the bench asked.

Bhushan said it was for the apex court to see whether the probe done by the SEBI was credible or not and whether some other independent organisation or an SIT was needed to be formed to investigate it.

“Where is the material before us for us to doubt what SEBI has done,” the bench observed.

It also took serious note of Bhushan’s claim that two of the members of the apex court appointed expert committee have serious “conflict of interest”.

The bench said there has to be some responsibility about the allegations being made as it was easy to level allegations.