Plea seeking report on Stock Market Crash after 2024 Lok Sabha Polls results from SEBI, Union Government filed in Supreme Court

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Recently, Advocate Vishal Tiwari filed a petition before the Supreme Court (SC) of India, requesting directives for the Central Government and the Securities and Exchange Board of India (SEBI) to provide a detailed status report on the recent share market crash and the resulting investor losses following the 2024 Lok Sabha election results. This petition is an extension of the ongoing Adani-Hindenburg case, where the SC had previously directed SEBI and relevant government agencies to investigate potential legal violations by the US-based short-seller Hindenburg Research. The aim was to determine if Hindenburg's actions contributed to market volatility and significant financial impacts on Indian investors.

Tiwari's petition raises concern about the lack of clarity regarding SEBI's progress on the mandated investigation and whether the government has implemented the expert committee's recommendations to strengthen market regulations. It underscores the need for transparent updates to ensure accountability and protect investor interests. The plea said, “The right to known of public and investors who suffered the loss that whether due to some irregularities and violations by any corporate group the Indian stock market crashed after Hindenburg report which caused a big loss to the public money. The result of the investigations made by SEBI in this respect shall be placed on record so that the things may not remain hidden and buried.”

The petition also highlights the sharp contrast between the market surge after the exit polls, which indicated a significant BJP victory, and the subsequent plunge following the actual election results, which caused a loss of Rs 20 lakh crore. This incident raises questions about the sufficiency of current regulatory mechanisms to prevent market manipulation. The petition argued, “It is said that after announcement of Exit polls in respect to the Lok Sabha 2024 results the share market went high but when the Actual Results were Announced than it resulted the crash of Share market. So again it has raised question that whether again the Regulatory Authority and Mechanism has failed and still the mechanism remains strengthen after having an example of 2023 share market crash. Whether again some manipulations were made after the Exit polls came.”

The petition details how the BSE benchmark Sensex surged by 2,507 points (3.4 percent) to a new high of 76,469 after the exit polls, only to plummet by 4,390 points (6 percent) to 72,079 the following day, marking the most severe single-day decline in 4 years. It suggests that despite the Supreme Court's earlier directives, the necessary regulatory changes to protect investors and ensure market stability have not been fully implemented. Advocate Tiwari's petition seeks renewed judicial and regulatory scrutiny to address these concerns and enhance market regulations. By doing so, the goal is to improve market stability and safeguard investor interests amid significant political and economic events.