On Friday, the Supreme Court will hear two public interest litigations (PILs) seeking a court-monitored investigation into the ‘conspiracy’ of short-seller Hindenburg Research against the Adani Group. In the PILs, filed by lawyers ML Sharma and Vishal Tiwari, it is alleged that the American company Hindenburg shorted Adani stocks, resulting in a “monumental loss to investors.”
“The report has harmed (the) country’s image. It has an impact on the economy…” Tiwari told a bench led by Chief Justice DY Chandrachud that his petition would be heard alongside the others on Friday. Sharma’s petition alleged that the markets had been impacted by media coverage of the report and that Nathan Anderson, founder of Hindenburg, had neglected to provide SEBI in India with evidence to support his claims.
“Concern of the present petition is — what is the fate of investors who (have) lost such amount of money, which brings a life-changing and life-ending impact on such investors with no redressal available,” Tiwari wrote in his petition.
The petition, which called for a judicial investigation by a panel led by a retired Supreme Court justice, also claimed that the Hindenburg report had “shaken not only the country’s stock exchange but also called into question the business practices employed by the businessmen in our country.”
The petition, which called the unregulated disbursement of loans by public sector banks a “matter of serious concern,” demanded the formation of a “special committee (to) oversee sanction policy for loans over 500 crores given to big corporate” entities.
Hindenburg’s report, which alleges “brazen accounting fraud… stock manipulation” by the Gautam Adani-led group, has sparked a massive backlash, with the opposition blaming the ruling Bharatiya Janata Party for alleged links between Prime Minister Narendra Modi and his government and Adani.
The Congress and other opposition parties, including the Trinamool Congress, the Dravida Munnetra Kazhagam, and the Shiv Sena (the group of former Maharashtra Chief Minister Uddhav Thackeray), have caused numerous adjournments of Parliament’s Budget session, demanding that allegations against Adani be investigated.
Opposition leaders have also raised concerns about the significant exposure’ of public financial institutions like the Life Insurance Corporation and the State Bank of India, which have invested in Adani equities.
On Tuesday, Congress MP Rahul Gandhi criticized the ruling BJP over the Adani Group’s rapid growth in fortunes, linking State overseas travels to the Gujarat billionaire’s global earnings.
The prime minister hit back on Wednesday, stating that ‘the entire ‘ecosystem’ was delighted… after some people’s remarks yesterday’.
The Hindenburg report caused a significant sell-off of Adani stocks and market value, with the flagship company losing more than $120 billion in a matter of days, prompting the cancellation of a $2.5 billion FPO. Some stocks rose, many due to debt prepayment letters, but Adani Group shares fell at the start of trading today.
