‘Hindenburg’s Adani report tarnished India’s image…’: SC to hear pleas Friday

The Supreme Court will on Friday hear two public interest litigations (PILs) seeking a court-monitored probe into short-seller Hindenburg Research’s ‘conspiracy’ against the Adani Group.

The PILs – filed by advocates ML Sharma and Vishal Tiwari – claim United States-based Hindenburg short-sold Adani stocks and caused a ‘monumental loss to investors’.

“The report has tarnished image of (the) country. It is affecting the economy…” Tiwari said in his petition. Sharma’s petition claimed media hype over the report had adversely affected the markets, and that Hindenburg founder Nathan Anderson had failed to provide proof of his claims to Indian regulators – the Securities and Exchange Board of India.

Hindenburg’s report – which claims ‘brazen accounting fraud’ by the Gautam Adani-led group -has triggered a massive row, with the opposition targeting the ruling Bharatiya Janata Party over alleged links between prime minister Narendra Modi, and his government, and Adani.

The Congress and other opposition parties, including the Trinamool, the Dravida Munnetra Kazhagam and the Shiv Sena (ex Maharashtra chief minister Uddhav Thackeray’s faction), have forced multiple adjournments of Parliament, demanding allegations against Adani be probed – either by a joint parliamentary committee or via a Supreme Court-monitored team.

Opposition leaders have also flagged the ‘large exposure’ of public financial bodies like the Life Insurance Corporation and the State Bank of India, which have invested in Adani stocks.

On Tuesday Congress MP Rahul Gandhi attacked the ruling BJP over the sharp rise in the Adani Group’s fortunes, linking State foreign visits to global gains by the Gujarat billionaire.

Parts of Gandhi’s speech were later controversially expunged.

The prime minister responded Wednesday with a jab at Gandhi and the Congress, declaring ‘the entire ‘ecosystem’ was excited… after some people’s remarks yesterday’.

The Hindenburg report triggered a massive rout of Adani stocks and market value, with the flagship firm losing over $120bn in days, forcing the cancelling of a $2.5 billion FPO.

Some stocks rallied subsequently – many on the back of loan pre-payment notices – but Adani Group shares dropped at the start of trading today, after MSCI Inc., a US financial firm, said it was reviewing the amount of Adani Group-linked shares freely tradable in public markets.

Bloomberg said nine of the group’s 10 stocks declined; the flagship Adani Enterprises Ltd. dropped as much as 10 per cent as experts declared it ‘unmitigated bad news’ for the firm.

The government has distanced itself, pointing to regulatory bodies capabel of taking the necessary action. Last week union finance minister Nirmala Sitharaman referred to SBI and LIC statements that said their exposures were ‘very well within the permitted limits’.

On Wednesday Reserve Bank of India chief Shaktikanta Das, while announcing monetary policy recommendations, referred indirectly to the Adani issue, telling reporters ‘… resilience of Indian banking system (is) much stronger… to be affected by a case like this’.