PIL In Supreme Court Seeks Probe On Hindenburg Report Against Adani Group

It was on January 24 that US-based Hindenburg published its report accusing Adani group of widespread manipulations and malpractices to inflate its stock prices. Adani Group refuted the allegations by publishing a 413-page reply and even went to the extent of terming it as attack against India. Hindenburg shot back with a rejoinder, saying that 'fraud cannot be obfuscated by nationalism and stood by its report.

Since the publishing of the Hindenburg report, Adani shares have been nosediving in the share market. The embattled group was also forced to recall its FPO, with the tumbling down of stock prices.

The petitioner, Vishal Tiwari, highlighted the drastic condition and fate of people when the shares 'fall' in the securities market due to various reasons.

"Lots of people who had the whole life time saving in such stocks gets a maximum setback due to fall in such shares with huge amount of money getting into drain. Various instances of suicides and other life taking incidences come up because of such huge loss of money where lifesaving of individuals is invested in."

The PIL petition further drew a comparison between common citizens and big corporations in terms of getting a long sanctioned. This process is not easy for the citizens whereas, loans worth thousands and lacs of crores are disbursed to big business entities in a very short time.

The plea said that he publication of Hindenburg Report has led to the loss of a huge amount for various investors who have invested their life saving in such shares. In the aftermath of an 'unprecedented attack on billionaire Gautam Adani's vast empire by Hindenburg', the market value of all 10 Adani stocks have halved with investors sitting with a colossal loss of Rs 10 lakh Crore, the plea stated.

"In the last seven trading sessions since the release of the report by the American short-seller, the market capitalisation of all 10 Adani Group stocks is down by over 51% to Rs 9.31 lakh Crore. Adani Group stocks fell 5-20% on Friday, wiping out ₹3.19 trillion in investor wealth after Hindenburg Research said it stood by its findings of alleged share price manipulation and accounting fraud by the conglomerate".

Interestingly, till date, the Respondents have taken no concrete step of action regarding the Adani-Hindenburg fiasco, despite there being a massive attack perpetrated on the economy system of the country.

It is the petitioner's case that State Bank of India which is India’s one of largest financial institutions, has provided loans amounting to $2.6 billion to companies in the Adani Conglomerate—there's no refinery process for loan disbursement, i.e., under what criteria and regulations this public money is spontaneously being used.

"The question that public interest now throws upon is how such public money is being floating in the money market without any refined process of loan being disbursed and such therefore has shaken the country through its huge exposure after the Hindenburg Report."

Though, the Adani Enterprises rejected the report as “unresearched” and “maliciously mischievous”, the present PIL aimed to focus on the fate of such investors who've lost their money with no redressal available.

Stating that's it's a matter of "serious concern", the plea argued that such unregulated disbursal of loan with huge loss in the form of such huge exposure has destroyed public money at large with no redressal being addressed by the Respondents as to how to recover the losses in respect to public money.

"It is ultimately the public money for which the Respondents are answerable and there needs to be strict concern for mitigating of such loan with clear process and sanction policy for such high-stake loan amount."

In this light, the plea also sought directions to setup a special committee for overseeing the sanction policy for High power loans crossing Rs. 500 crores which are given to big corporates.

Another PIL was filed a few days back by serial litigant Advocate ML Sharma, seeking to declare 'short-selling' as the offence of fraud. He seeks investigation against Nathan Anderson, the founder of Hindenburg, "for exploiting innocent Investors via short selling under the garb of artificial crashing".

Case Title: Vishal Tiwari vs UOI