Sun. Jun 16th, 2024


Days before the Budget session of parliament, it was business as for the economy, the share market and politics. Everyone was gearing up for  newly elected President Droupadi Murmu’s maiden address to the joint session of parliament, and the Finance Minister’s Budget announcements. 

In came the Hindenburg report, ‘Adani Group: How the World’s 3rd Richest Man is Pulling the Largest Con in Corporate History’. The title was designed to catch eyeballs, urgent, far and wide. The Adani Group was the only infrastructure company in the top five or 10 global firms, both in terms of market capitalisation and in expanse, in a league dominated by tech.

Once it grabbed attention, the impact was calamitous. The Adani Group’s share prices went on a downward spiral. It took a toll on other companies’ shares too, and the share market took a bad hit. The political temperatures soared. The budget session was washed out by the Congress party and parties supporting it. In the Hindenburg report, they thought they had finally found an issue to target Prime Minister Narendra Modi and his government.

Four months later, just when the market was stabilizing, and the Karnataka turbulence had settled to an extent, news broke that the Supreme Court-appointed committee on the Adani-Hindenburg issue had concluded: “prima facie no regulatory failure on part of the SEBI around the allegation of price manipulation.”

The composition of committee constituted by the Supreme Court should also be noted. The committee was led by former Supreme Court Justice AM Sapre, with former SBI Chairman OP Bhatt, former Bombay High Court Judge Justice JP Devadhar, reputed banker KV Kamath, infosys co-founder Nandan Nilekani and senior lawyer Somasekhar Sundaresan. It was the demand of some of the petitioners. It is worth noting that Chief Justice DY Chandrachud had refused to accept the Centre’s suggestion on the constitution of the committee. The Chief Justice had then said “We don’t want sealed cover suggestions. Even if we don’t accept your suggestions, the other side will have the impression that we accepted the government-adopted committee. I want to have complete transparency. We will appoint our own committee and a sense of trust should be there.”

The competence, independence and impartiality of the expert committee was thus beyond any doubt. The most important findings are – short selling on Adani stocks and undue profiting by some entities; No price manipulation by Adani Group Found; empirical data shows the retail investment exposure to Adani stocks has increased multifold after January 24; The report has also very clearly mentioned that the mitigating measures taken by the Adani Group has helped in building confidence in the stock and the stocks are stable now. 

The committee findings make it abundantly clear that the Hindenburg report was motivated mischief to make money and create a political upheaval in the Indian polity and economy. This is further substantiated by Hindenburg’s stated position that it was a shortseller group and there was nothing illegal in making money via short selling.

Second, much to the dismay of the Congress party, which had been gunning for Prime Minister Narendra Modi and his government on the issue, George Soros, a Hungarian-born American billionaire and a known Modi baiter, said, “In India, Modi and business tycoon Adani are close allies. Their fate is intertwined. Adani Enterprises tried to raise funds in the stock market but failed…Modi will have to answer on Adani in parliament. This will significantly weaken Modi’s stranglehold on India’s federal govt. I expect a democratic revival in India”.

It is open to public wisdom snd the kind of democratic revival Soros saw, when he more than once openly praised the Congress-led UPA government at was in power.

What Soros said and the publicly stated position of Hindenburg (or vice-versa) is corroborated by the preliminary findings of SEBI and the Enforcement Directorate that there was unusual short selling activity around Adani shares a few days before he Hindenburg report with the intention of making money.

This was not the first time that a foreign media report emerged ahead of a parliament session or election and was immediately picked up by sections of the media and opposition parties to target the Modi government and create doubts in the people’s mind. It has happened, most prominently in case of Pegasus and Rafale. In both the cases, the matter ended after the Supreme Court pronounced a verdict. Remember Rahul Gandhi in 2019 had had tried to make an election issue out of the Rafale deal but ended up offering a written unconditional apology to the Supreme Court.

Now the questions which the protagonists of the Hindenburg report, lobbyists and the Congress party leadership will perhaps need to answer are:

– Did they not intentionally cause the loss of small investors’ money? Not only did the Adani share prices drop, the stock market as a whole went down.

– Why did they not listen to the clarifications given by the SBI, LIC, RBI and others that no wrongdoing was done and public money was safe? They banked on the  allegations of a foreign short seller rather than their own banks, investigative and regulatory agencies.

– Why was entire Budget session of parliament washed out, leading to a wastage of time and public money?

– Why did they persist in making noises even after the Mauritian finance minister strongly rebutted allegations of shell companies in parliament?

– Why did they continue making wild charges even after Chief Justice DY Chandrachud cautioned the lawyer of a petitioner to stop using the phrase “there was a regulatory failure…you cannot stand here and say that there was regulatory failure…because whatever you say here affects stock markets…let us be responsible…easy to stand and make allegations.”

– Why did the Congress and some of its allies insist on a Joint Parliamentary Committee probe when the Supreme Court-appointed committee constituted by it was seized of the matter?

– Is it not a fact that the Congress while protesting in parliament along with other opposition parties had with banners and placards demanded a probe by a Supreme Court committee or a JPC?

– Did it not insist on a JPC even as the likes of Sharad Pawar, Mamata Banerjee, Jagan Mohan Reddy and KCR were satisfied after the constitution of a committee to probe the issue, only to keep the political pot boiling?

– Did this entire group and parties not have faith in the Supreme Court?

– How come some foreign banks which were hyper active after the Hindenburg report went bankrupt and the Indian banks against whom allegations were made remained strong amidst the shake-up of western banks?

On a broader level, it is an issue of right or wrong. Is doing big business and going global with the same business wrong? Or, doesn’t “dream big, think big”  rightly signify an aspirational New India, which wants to be at the head table of developed nations in the world? No one is condoning wrongful business practices in violation of the law of the land, but the fate of millions of ordinary investors and workers must not be allowed to suffer because someone sitting abroad in some fancy office has decided to make money at their cost or has some whimsical desire to decide how a nation must run and who should run it. 

(Sanjay Singh is a senior journalist based in Delhi)

Disclaimer: These are the personal opinions of the author.


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