The Supreme Court will on Friday hear two public interest litigations (PILs) directed at the court-monitored probe into Hindenburg Research’s “conspiracy” against the Adani Group. The PIL – filed by advocates ML Sharma and Vishal Tiwari – alleges Adani’s short-selling shares in US-based Hindenburg caused “huge loss to investors”.
Vishal Tiwari said “The report has tarnished the image (of the country). It is affecting the economy…” in his petition. Sharma’s petition alleged that the media hype surrounding the report had influenced the markets and that Hindenburg founder Nathan Anderson had failed to provide evidence of his claims to India’s regulator SEBI.
The Hindenburg report – which alleges “brazen accounting fraud … stock manipulation” by the Gautam Adani-led group has sparked 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, Dravida Munnetra Kazhagam and the Shiv Sena (a faction of former Maharashtra Chief Minister Uddhava Thackeray), have forced multiple adjournments of the budget session of parliament and are demanding an inquiry into the allegations against Adani.
Opposition leaders also pointed out the “huge exposure” of public financial institutions such as Life Insurance Corporation and State Bank of India, which invested in Adani shares. Congress MP Rahul Gandhi on Tuesday hit out at the ruling BJP over the surge in fortunes of the Adani Group, which has linked foreign visits to the state to the Gujarati billionaire’s global profits. Parts of the speech were later deleted.
The prime minister responded with a jab of his own on Wednesday, saying “the whole ‘ecosystem’ was excited … after some people’s comments yesterday.”
Hindenburg’s news triggered a massive slide in Adani’s shares and market value, with the flagship losing more than $120 billion in days, forcing the cancellation of a $2.5 billion FPO. Some stocks rose – many on the back of the loan prepayment announcement – but Adani Group shares fell in early trading today.
The government distanced itself and pointed to regulatory authorities capable of taking the required measures. Last week, Union Finance Minister Nirmala Sitharaman referred to SBI and LIC statements that exposures were “well within limits”.
On Wednesday, Reserve Bank of India chief Shaktikanta Das made an indirect reference to the Adani issue while announcing monetary policy advice, telling reporters “…the resilience of the Indian banking system (is) much stronger…”
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