India News | SC Dismisses Mahua Moitra Plea Seeking SEBI Mandate for Public Disclosure of Identities of Ultimate Owners of AIFs, FPIs
Get latest articles and stories on India at LatestLY. A bench of Justices BV Nagarathna, R Mahadevan and DK Upadhyay said the relief sought by Moitra would effectively require the Court to create a new regulatory framework for public disclosure, which it could not do while exercising its jurisdiction under Article 32 of the Constitution under which petitioner MP has approached the Court.
New Delhi [India], October 29 (ANI): The Supreme Court on Thursday dismissed TMC MP Mahua Moitra’s plea seeking a direction to the securities market regulator SEBI to mandate public disclosure of the identities of the ultimate beneficial owners, or persons who ultimately own or control investments, in Alternative Investment Funds (AIFs) and Foreign Portfolio Investors (FPIs), holding that such a direction could not be issued by the Court in the absence of an existing legal or regulatory framework requiring such disclosure.
A bench of Justices BV Nagarathna, R Mahadevan and DK Upadhyay said the relief sought by Moitra would effectively require the Court to create a new regulatory framework for public disclosure, which it could not do while exercising its jurisdiction under Article 32 of the Constitution under which petitioner MP has approached the Court.
Moitra’s plea sought directions to SEBI for full disclosure of the ultimate beneficial owners, the last natural persons and investment portfolios of Alternative Investment Funds (AIFs), Foreign Portfolio Investors (FPIs) and their intermediaries operating in India.
In simple terms, the plea sought to make public the identities of the actual individuals who ultimately own, control or financially benefit from investments made through these funds, even where the money is held through layers of funds, companies, trusts or other intermediaries. While such information may be available to SEBI when required under the regulatory framework, Moitra was seeking its full public disclosure on the ground that the information directly affects the interest of nearly 14 crore retail investors who put their hard-earned money into the Indian stock market.
Advocate Prashant Bhushan argued that ordinary investors should be able to know who was ultimately behind large investments being made in companies, particularly where investments were routed through complex or opaque structures involving foreign entities.
He said the issue was not merely about information being available with SEBI. The information, he argued, should be publicly accessible so that citizens could know who was purchasing and disposing of shares and who ultimately stood to benefit from those investments.
Bhushan also raised concerns over possible manipulation of the stock market through opaque financial instruments and said the issue had to be considered from the perspective of millions of retail investors who did not have the same information or resources available to institutional investors and regulators.
He relied on a report of a committee appointed by the Supreme Court in an earlier matter and submitted that the concerns raised in Moitra’s petition would become clearer from the findings of that committee.
The bench, however, questioned how the Court could order public disclosure when there was no existing legal or regulatory requirement for such disclosure.
The Court noted that SEBI’s position was that the relevant information is disclosed to the regulator whenever detailed disclosures are sought under the existing framework. But, as SEBI had stated in its September 19, 2025 reply, there was no present legal framework requiring the information to be made public in the manner sought by Moitra.
The bench asked Bhushan whether the position would be different if there was an existing framework requiring disclosure, but the authorities were not following it.
The Court indicated that in such a situation a petitioner could ask the Court to enforce the existing framework. But it pointed out that was not the position in the present case.
“If there is a framework and it is not being followed, you are asking us to [ensure] disclosure,” the Court observed. “Now there is no such policy.”
The bench then questioned whether granting Moitra’s prayer would mean that the Court itself was creating a new policy.
“Wouldn’t we be touching upon the policy decision?” the Court asked.
Bhushan submitted that if the Court found disclosure of ultimate beneficial ownership necessary in the public interest, it could direct such disclosure so that citizens could know who was behind investments in the market.
He argued that the right of citizens to know who was purchasing and disposing of shares could not be defeated merely by routing investments through layers of financial entities.
The bench also questioned the premise that retail investors were incapable of making informed decisions.
“Investors are not naive,” the Court observed, pointing out that investors are guided by advisers and also conduct their own research before investing.
Bhushan, however, argued that ordinary investors could still suffer when they invested in companies, and their share prices subsequently fell, without knowing the interests or entities behind large investments.
The bench observed that it would be a “Herculean task” for Moitra to persuade the Court to direct public disclosure when there was no existing framework requiring it.
The Court also questioned Moitra’s locus in approaching it, given that she is a sitting MP and not a stakeholder/retail investor herself. When Bhushan clarified that Moitra herself was an investor, the Court observed she was then seeking private interest relief and not public.
Bhushan said Moitra had approached the Court as a citizen as well and that merely being an MP could not disentitle her from invoking Article 32.
“Just because she is an MP does not disentitle her from coming before this Court,” Bhushan submitted.
He argued that if the Court held that an MP could not approach it, it would raise the question whether any Member of Parliament could approach the Supreme Court under Article 32 on an issue concerning citizens.
The bench clarified that the issue was not simply whether Moitra was an MP or a citizen. It questioned whether, having regard to the nature of the prayers, the Court could grant the relief sought at her instance.
The Court also referred to an earlier matter involving political figures which it had entertained, but said the nature of the prayers and the circumstances of the present case had to be considered independently.
Bhushan maintained that Moitra was concerned about the fate of nearly 14 crore investors and was not using her status as an MP as the basis for seeking the relief.
Solicitor General Tushar Mehta, representing the Centre and SEBI, opposed the plea and disputed Bhushan’s submissions on the regulatory position. Bhushan, in response, relied on SEBI’s reply to the petition.
The bench then returned to the central issue: whether it could direct public disclosure when the regulator itself had said there was no existing rule requiring it.
The Court noted that SEBI’s September 19, 2025 response said there was no present legal framework requiring public disclosure of the information sought by Moitra. At the same time, SEBI had stated that the relevant information is made available to the regulator when detailed disclosures are sought under the existing regulatory framework.
The Court therefore held that Moitra was effectively seeking a direction requiring the creation of a public-disclosure framework.
The bench said it was not deciding whether greater disclosure would be desirable or whether the policy sought by Moitra was justified on merits. The question was whether such a policy could be imposed by the Court in a petition under Article 32.
“We are not in the merits. We are on whose instance and at whose instance we can [grant the relief],” the Court observed during the hearing.
The Court said a direction for full public disclosure would require an existing legal and regulatory framework governing such disclosure.
“Having regard to the prayer made, we find under Article 32 such a prayer cannot be granted,” the Court said, holding that granting the relief would effectively require the Court to mandate a regulatory framework that does not presently exist.
“In its absence, the Court cannot direct full disclosure,” the bench held. The Court accordingly dismissed Moitra’s plea. (ANI)
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