Why Has SEBI Sealed Its Mouth About Adani Group’s Stock Manipulation?
Since January 25, investors have been in a frenzy due to claims of fraud against the Indian Adani company by US-based Hindenburg Research. The seven publicly traded companies in the conglomerate have lost $68.3 billion, or almost a third of their market value, since the publishing of the damning report.
The Hindenburg allegations have called into question the Adani Group’s financial viability and the management style of Gautam Adani, who is in charge of a vast empire that now includes ports and airports as well as oil, cement, and data centres.
If it turns out that the charges against the Adani Group of artificially inflating the value of its stock through manipulation and then obtaining money by pledging those shares are true, banks like SBI could take a significant hit if the value of those shares drops.
Due to the bank’s significant exposure to the Adani group of companies, the security of millions of Indians’ assets in organisations such as LIC and SBI is being called into doubt.
As opposition parties questioned Prime Minister Modi’s silence about the accusations made by the Hindenburg report against the Adani group, the Adani stock collapse reverberated in the Parliament. A joint parliamentary investigation of the Adani Group was also urged. The most pressing concern is why Sebi and the government have been so quiet about the Adani situation.
Does SEBI take a bribe?
Hindenburg Research Company, an outside organisation, has thoroughly investigated Adani Group’s stock manipulation and fraud. But here in India, there is an extensive department called SEBI which has too many employees working for the betterment and charging so much salary, and even its buildings and offices are too luxurious; then why is it too difficult for SEBI to address this issue? Sebi is still unable to perform its duties even after all of these things. What was SEBI doing for so many years? Why has SEBI remained silent over Adani Stocks? Does SEBI take a bribe? SEBI’s job is to control the shareholders and the company.
If SEBI cannot do its job and does not fulfil its purpose, then SEBI should be dismantled! SEBI’s primary responsibility is to control and monitor the activities of the securities market, including those of stock exchanges, brokers, merchant bankers, and other intermediaries. Additionally, SEBI guarantees the securities market operates orderly and encourages openness and justice in the marketplace. SEBI should thoroughly investigate the Adani case while keeping the public’s interest in mind.
Despite such a horrifying situation, SEBI, RBI, and the government have tapped their mouths.
Stock manipulation is the illegal practice of artificially increasing or deflating a security’s price, frequently through dishonest or fraudulent techniques. If a business or person is proven to have participated in such acts, they may be subject to harsh legal penalties, such as fines and jail time.
We expected the RBI or SBI to look into the claims as they involve the wealthiest person in the country. The government cannot risk the hard-earned money of the Indian people to benefit the Prime Minister’s cronies. The Adani Group has received a total investment from the LIC of 36,474.78 crores.
At the same time, Indian banks have combined to invest around 80,000 crores. Even though there have been accusations of market manipulation, fraudulent activity, and other misdeeds, they continue to do it. The Group has suffered a $100 billion loss since being exposed.
Why was the topic not mentioned in Finance Minister Nirmala Sitharaman’s Budget speech, and why was the government silent? Why did the FM not declare an independent audit and investigation by the Serious Frauds Investigation Office/Enforcement Directorate, given the significant fraud alleged by Hindenburg Research on the Adani group? WHY did the Modi government permit the SBI Employees Pension Fund, SBI Life, and LIC to invest $525 CR in the Adani FPO despite the value decline? Who is to blame for LIC and SBI’s market caps declining by 1,48,505 CR since January 24?
It is time for LIC to switch its slogan from Zindagi ke saath bhi, zindagi ke baad bhi (remain with life, beyond life) to Zindagi ke saath thi, ab Adaniji ke saath hai (remained with life, now with Adani). This is how LIC’s scenario is. Because SEBI is unable to protect both small and large corporations, ordinary people are losing money. People are losing share value, so what is the use of this so-called department, Sebi, and should we dismantle it if it can’t work correctly? Why is Sebi not giving any statements? And the prime mentor is silent on the issue, and you will not hear a word from him.
Ever since Hindenburg Research’s damning research was made public, there has been intense selling pressure on the shares of the Adani group. The effects were so severe that Adani Enterprises was forced to cancel its follow-on public offer (FPO) even though it had received a full subscription.
Adani Enterprises’ stock has experienced such a drop that it is now at Rs 1.564.70, less than half of the FPO price band set between Rs 3,112 and Rs 3,276. Sebi can also examine the sources of short positions in the Indian market and consider whether or not they were instituted from outside or inside the legal framework.
SEBI-Adani Close Relative?
Moreover, as opposition parties call for an investigation by the SEBI and the RBI into the allegations made against the Adani Group in the wake of the Hindenburg Research report, concerns are now being raised about a potential conflict of interest in the SEBI investigation given that Adani had a close relative on one of the Board committees.
Cyril Shroff, a corporate and project finance attorney and managing partner of Cyril Amarchand Mangaldas, was one of the members of the 2017 Committee on Corporate Governance, according to information on the SEBI website. Paridhi Shroff, the daughter of Shroff, is wed to Karan Adani, the CEO of Adani Ports and SEZ Limited and the son of Gautam Adani.
Cyril Shroff, Karan Adani’s father-in-law and CEO of Adani Ports, is an essential member of the SEBI committee. Surprisingly, he also counsels the #Adani group on legal matters. The system as a whole is broken and damaged. Nayini Anurag Reddy, an entrepreneur, tweeted, “Kudos Modi for the mess.
The Congress on Thursday demanded that the allegations made by Hindenburg Research against the Adani group and Adani companies be subjected to a fair investigation by the Chief Justice of India (CJI) or a joint parliamentary committee investigation. The Congress claimed its former president Rahul Gandhi forewarned about “a situation like this” months ago.
The party also claimed that Prime Minister Narendra Modi was the “primary mentor” of industrialist Gautam Adani and questioned under whose orders the Life Insurance Corporation (LIC) boosted its investments in the Adani group’s numerous enterprises and why the Reserve Bank of India (RBI) took “this long to make some weak sounds” since the facts mentioned by Hindenburg have been in the public domain for a long time.
Stocks in Adani Group were obviously overvalued, but the detailed claims of fraud and market manipulation are truly horrifying. Last year, there were rumours of the same thing on social media, but since the authorities never addressed the issue, people stopped talking about it. Since Adani is only one example, other companies could emerge if a regulatory void is not addressed.
Edited by Prakriti Arora
