CLOSURE!

 

 

 

 

 

THE Adani Group of companies has received a new year’s gift in the form of the Supreme Court verdict on the allegations of manipulation of stocks levelled by US-based short-seller Hindenburg Research. The apex court has rejected the demand for a transfer of the Adani-Hindenburg case from the Securities and Exchange Board of India (SEBI) to the Central Bureau of Investigation (CBI) or a Special Investigation Team (SIT) thus reposing faith in India’s market regulator. The development has brought a near-closure to the issue that had severely jolted the Adani Group last year, in the process wiping out over 100 billion dollar investor wealth. With the rejection of the demand for a separate probe, the apex court has made two things clear -- One, it has hailed the SEBI and its robust systems to regulate the markets. Two, it has concluded that mere speculations against top companies, based on some media reports, would not hold ground henceforth. The message is clear for the habitual schemers -- Don’t try to mess with the India Growth Story! As expected, the Adani Group stocks recorded a fine rally even before the verdict was announced. It was a message of confidence by investors in the port-to-energy conglomerate helmed by billionaire Mr. Gautam Adani. It was also a solid riposte to the serious allegations levelled by the US short-seller which had warned of “largest con in corporate history” but failed to substantiate the wild allegations.

 

The issue had also assumed political colour with many in the Opposition gunning for the Adani Group on the nonsensical premise of the conglomerate getting undue advantage from the Central Government. All the hullabaloo created on the streets, in the media, and in the Parliament against the group should now come to a rest. Ever since the Hindenburg Research report was made public there was a lurking suspicion about its authenticity and timing of the release. The short-seller was clearly at advantage as it had taken positions before the group’s stocks plummeted over the allegations of manipulation. It was a clear indication that the move was planned to accrue financial gains for short-sellers. The timing was also suspicious as Mr. Gautam Adani had just scaled the ladder as World’s 3rd Richest Man. The group was also on the verge of bringing out an FPO worth Rs 20,000 crore which finally had to be cancelled due to the sudden fall in stock prices. Within a short time there was another round of allegations against the Adani Group with the Organised Crime and Corruption Reporting Project (OCCRP), of known India-baiter billionaire philanthropist Mr. George Soros, accusing the group of using dubious means for business gains.

 

The chronology of all these events looked highly incredulous. Its fallacy slowly unravelled when the group stocks made a resurgent return on the bourses. Now, with the Supreme Court refusing to deal with petitions demanding probe by special agencies on the basis of newspaper articles or third-party reports, the issue has become non-existent. The bench headed by Chief Justice of India Mr. Justice D Y Chandrachud has understandably refused to take media reports as evidence, for, such external reports can only be treated as information. The apex court has also done well to express faith in SEBI’s working, noting that the regulator’s conduct inspires confidence. It has established the market regulator’s authority and credibility which could have been undermined if the probe was handed over to other agencies. SEBI has arguably done everything under its powers to probe the issue. It now needs to find ways to dig out ownership of FPIs sitting in tax havens for the sake of total closure.