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 told a bench headed by Chief Justice DY Chandrachud, asking it to take up his petition with the other on Friday. Sharma’s petition claimed media hype over the report had affected the markets, and that Hindenburg founder Nathan Anderson had failed to provide proof of his claims to Indian regulator SEBI.
Tiwari’s petition said: “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…”
The petition – which sought a judicial probe by a committee headed by a retired Supreme Court judge – also said the Hindenburg report ‘has shaken not only country’s stock exchange but also put a question mark on business methods adopted by the businessmen in our country’.
Referring to unregulated disbursal of loan by public sector banks as a ‘matter of serious concern’, the petition demanded a ‘special committee (to) oversee sanction policy for loans over ₹500 crores given to big corporate’ entities.
Hindenburg’s report – which claims ‘brazen accounting fraud… stock manipulation’ 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.
Watch | Rahul Gandhi vs Modi govt’s Parliament face-off in Adani row
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’s Budget session, demanding allegations against Adani be probed.
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 the speech were later expunged.
READ | Adani issue roils Parliament as Rahul Gandhi leads charge
The prime minister responded Wednesday with a jab of his own, 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 – many on the back of loan pre-payment notices – but Adani Group shares dropped at the start of trading today.
READ | The 19 hours that led to scrapping of Adani’s $2.5 billion FPO
Bloomberg said nine of the group’s 10 stocks declined; flagship Adani Enterprises Ltd. dropped too as experts warned of ‘unmitigated bad news’.
READ | Adani stocks slip after 2 days of gains, MSCI to review free-float status
The government has distanced itself, pointing to regulatory bodies capable of taking required action. Last week union finance minister Nirmala Sitharaman referred to SBI and LIC statements that said exposures were ‘well within 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…’
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