Supreme Court Declines Moitra's Plea Seeking Investor Disclosure

In a ruling on Thursday, the Supreme Court declined to hear a plea by Trinamool Congress MP Mahua Moitra that sought mandatory public disclosure of the real owners behind foreign money in Indian markets. The petition asked SEBI to publicly reveal ultimate beneficial owners and investment portfolios linked to Alternative Investment Funds, Foreign Portfolio Investors and their intermediaries.

A three-judge bench of Justices B.V. Nagarathna, R. Mahadevan and D.K. Upadhyay disposed of the writ petition. Its central finding was that India currently lacks any legal or regulatory structure that compels the public release of such information. In the absence of that structure, the bench said, the relief sought could not be granted.

The court held that it could not use its discretion to issue a writ of mandamus under Article 32 that would direct the authorities to make complete beneficial ownership information public. At the same time, Moitra was permitted to take up the grievances in her petition with the Union government and SEBI.

Appearing for the petitioner, Prashant Bhushan told the court that heavy investments were being made in Indian companies through overseas entities whose genuine investors could not be identified. He warned that this lack of openness could facilitate breaches of SEBI rules and open the door to share price manipulation. Bhushan added that many countries already require beneficial ownership to be disclosed.

But the bench asked whether it could order such disclosure when no policy made it obligatory. Justice Nagarathna said that the situation would be different if a disclosure rule existed and the petitioner was seeking its enforcement.

Opposing the plea, Solicitor General Tushar Mehta argued that the petitioner's objective was to ensure foreign investment did not enter the country. Bhushan replied that disclosing beneficial owners would not affect legitimate investment.

The order records that AIFs and FPIs report their investment details to SEBI or custodians, which makes regulatory supervision possible. The court, however, made clear that no current legal framework requires investments to be disclosed publicly on an entity-by-entity basis, as the petitioner had demanded.