In January 2023, Hindenburg had made serious allegations of stock manipulation and accounting fraud against the Adani Group. After this report, the shares of Adani Group companies fell by about $ 150 billion. This has usually been the work of the Hindenburg report. Hindenburg, which earns by dropping shares all over the world, probably no longer has the trust of Indian investors. This is the reason why the Indian stock market did not see the same stir on Monday as it did when the first report came. But along with this, with the arrival of such a report, questions are bound to be raised on the role of SEBI. Since SEB is the regulatory body of the Indian stock market, such allegations against it have raised questions on its impartiality and functioning. SEBI has the responsibility to maintain transparency and impartiality in the market, but a new controversy has arisen after Hindenburg’s allegations. This issue has also created a stir in the political world. Opposition parties have raised questions on the impartiality of SEBI and the role of the government. But the way Congress is aggressive about the Hindenburg Report and the way Bharatiya Janata Party is trying to reject the Hindenburg Report, it seems that the profit and loss of both are somehow connected.
1- Hindenburg’s allegations have some substance
Hindenburg alleges that on 22 March 2017, 5 years before Madhavi Buch became the SEBI chief, her husband Dhaval Buch had sent an email to Mauritius fund administrator Trident Trust and told that he and his wife had investments in Global Dynamic Opportunity. Dhaval had requested that he be allowed to operate this fund alone. It is clear that before being appointed to an important role in SEBI, Dhaval wanted to remove his wife’s name from it. Hindenburg says that we have evidence of the revelations made on the Adani Group and the same thing has come to light in more than 40 independent media investigations. But no action has been taken by SEBI. The responsibility of investigating these allegations was also in the hands of the SEBI chief. On the contrary, SEBI issued a show cause notice to us on 27 June 2024. This notice was given to us due to the short position taken in Adani shares.
Adani Group has said that we have no business relationship with the people whose names have been mentioned in the Hindenburg report. This is just an attempt to deliberately defame. Adani Group has said that all these allegations made earlier have been thoroughly investigated which have proved to be completely baseless. These have already been rejected by the Supreme Court in January 2024.
The Buch couple has called the allegations baseless and accused it of attacking SEBI’s credibility and trying to defame the chairperson’s character. The SEBI chief says that the investment in the foreign fund in which Hindenburg is accusing was done in the year 2015. At that time we were private citizens. The couple is ready to present all the documents in this regard. Not only this, all such documents were already submitted to SEBI. The SEBI chief says that Hindenburg has violated many rules in India, for which it has been sent a notice. Instead of responding, it has tried to attack SEBI’s credibility. But to maintain SEBI’s credibility, it is necessary that SEBI’s investigation should be conducted in such a way that the common people as well as the opposition of the country do not get a chance to say anything.
5- Butch should clarify whether she was part of the SEBI team investigating the Adani Group case or not?
The biggest question that is arising after the latest report of Hindenburg is whether Madhabi Buch was a part of the SEBI team investigating the Adani Group case? Both SEBI and Madhabi Buch should answer this question. However, citing media reports, BBC writes that SEBI chief Madhabi Buch had briefed the six-member panel constituted by the Supreme Court on the investigation of the Adani case. If this is true, then Madhabi Buch was part of the investigation as the SEBI chief. Allegations are being made that if Buch knew that he had invested in the company on which questions are being raised in the past, then he should have kept himself away from the investigation. However, a clear answer to this question has not come out yet. If clarification comes, it will bring relief to both SEBI and the government.
3-The public has come to know that this is a conspiracy
It is no secret that Hindenburg makes a lot of money as a short seller. Short selling is a process in which investors borrow stocks that they expect will fall in price and then sell them. When the stock price falls, they buy them back and return them to the lender, making a profit. Hindenburg often makes serious allegations against companies based on its research, such as financial irregularities, fraud or other types of abuse. These allegations often lead to a decline in the price of those companies’ stocks. If Hindenburg has already short-sold the stocks of that company, it benefits financially from that decline. Following the reports of Hindenburg research, the share prices of some companies in the Indian stock market have fallen. To take advantage of this situation, various market players can use short selling and other financial strategies. Some investors may try to make profits from short selling when the stock prices fall due to Hindenburg’s report. Apart from this, due to uncertainty in the market, some investors do panic selling, which can cause the share prices to fall even further, which can be taken advantage of by short sellers. The public has digested this fact. This is proved by the fact that on Monday the storm was not seen in the Indian market as expected. It is clear that investors have more faith in Adani than in the Hindenburg Report.
4-Why does it seem more of a political issue than an economic one?
Now it is almost clear that the Hindenburg report is prepared against Indian industrialist Gautam Adani out of political malice. However, the purpose of writing this is not to give a clean chit to Adani. It may also be that the Hindenburg report is correct and SEBI is hiding a lot. But the way American businessman George Soros is hell bent on against India’s Prime Minister Narendra Modi, and the kind of image he has, the way the Hindenburg report often comes during the Parliament session, the way the Indian stock market has been falling down after the report comes out, it seems that this is done as a part of a well thought out strategy. It is obvious that the opposition enjoys this a lot. The only job of the opposition is to gain power by maligning the ruling party by hook or crook. Therefore, it cannot be said that the opposition is doing anything wrong. But what happened with the Hindenburg report this time was surprising. It did not happen as was being thought. Meaning that the Indian markets remained stable. Whereas in India the opposition is nowadays dominating the ruling party on every issue. This time after the Hindenburg report came out, it seemed that the government was bound to be criticized a lot. But since the money of Indian investors was not lost, this time Hindenburg’s bet backfired. Last time after the Hindenburg report came out, Adani Group had suffered a loss of more than $150 billion.
The biggest thing is that the Congress party is a little more excited about the Hindenburg report. Like last time, this time too the Congress has demanded a JPC inquiry into the matter. Congress President Kharge said that the government should immediately remove all conflicts of interest in the investigation of the Adani Group. Kharge said that after the disclosure of the Hindenburg report of January 2023, SEBI had given a clean chit to Prime Minister Narendra Modi’s associate Adani in the Supreme Court. Now new allegations have surfaced about a transaction involving the SEBI chief. Leader of Opposition Rahul Gandhi also attacked the central government. He said that the sanctity of SEBI has been affected. The sanctity of the institution has been compromised. Why has the SEBI chief not resigned yet? Who will be responsible if the huge earnings of investors are lost? Will the Supreme Court take suo motu cognizance?
BJP has rejected the Hindenburg report and called it a conspiracy to defame the market regulator. BJP’s Rajya Sabha MP and party spokesperson Sudhanshu Trivedi, former Union Minister Rajiv Chandrashekhar took the lead on behalf of BJP. Later, former Union Minister Ravi Shankar Prasad also held a press conference and blamed Congress for this.
5- George Soros is not innocent, he can become Rahu for Rahul Gandhi
American businessman George Soros has a major stake in Hindenburg. George Soros has been accused of so many things that it seems more appropriate to call him notorious. He is accused of making a lot of money by destroying the Bank of England in 1992. It is said that Soros had earned a billion dollars at that time. With the help of Soros Open Society Foundation, he is active in about 100 countries. Soros is also accused of spending Rs 125 crore to defeat George Bush, who was contesting the US presidential election. It is said that he had invested 10 lakh dollars to destroy the media company Fox News. Similarly, he spent four lakh pounds in running a campaign against Brexit. Soros has been saying all sorts of nonsense about the Indian Prime Minister and he did not hesitate to call former US President Donald Trump a thug.
Soros had called Modi, Trump, Chinese President Xi Jinping and Russian President Vladimir Putin dictators at the World Economic Forum (WEF) held in Davos, Switzerland in 2020. Soros has been alleging that these leaders promote dictatorship by strangling democracy in their respective countries. Regarding Narendra Modi, he had said that he wants to make India a Hindu nation.
BJP has often raised the question that what is the relationship between Rahul Gandhi and George Soros. On Monday also, BJP leader Ravi Shankar Prasad raised questions on the relationship between Rahul and George Soros. Rahul Gandhi is accused of creating an atmosphere against Indian democracy by reaching America on 30 May 2023 before PM Modi’s US visit. In fact, Rahul Gandhi was seen meeting with Soros’s close aide Sunita Vishwanath. The way Rahul Gandhi has made his place among the public in the last few months, his relationship with Soros may prove costly. Obviously, the Bharatiya Janata Party is trying to distract Rahul Gandhi from Hindenburg’s allegations.
And will try to bring George Soros’ connections to the fore.
Source (PTI) (NDTV) (HINDUSTANTIMES)