U.S short seller, Hindenburg created an upheaval in the in the stock market as it released it’s report directly accusing the Indian conglomerate, Adani Group. A little over three months, on 24th January, 2023, Hindenburg report was released with a sensational title that read, “Adani Group : How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History.” The report which was a result of a two year long investigation indicated that the Adani Group was involved in a brazen stock manipulation and accounting fraud scheme panning over a decade.
The report wiped out more than $150 billion from Adani group’s market value in a mere five weeks since January 24 and Gautam Adani lost his place as Asia’s and India’s richest man. On January 29th, Adani group proceeded to release a 413 page statement which accused Hindenburg report of being false and a stunt to tarnish the company’s image. He called it a “calculated attack” on India. Later , in a wild turn of events Adani called off the CPO of Adani Enterprises which raised many eyes . Amidst the chaos several leaders of the opposition party, including the Congress, the DMK, the AAP and some Left parties carried out a protest march to the Enforcement Directorate’s Delhi office to file a complaint against the Adani Group over the Hindenburg report, alleging ‘corporate fraud, political corruption, stock-price manipulation’. On March 2, the apex court finally directed the capital market regulator SEBI to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report. The six-member expert panel which was set up by the Supreme Court following the publication of the Hindenburg report on the Adani Group submitted a report in a sealed cover to the apex court on May 8.
The Supreme Court of India on Friday i.e 12th May,2023 informed the Securities and Exchange Board of India (SEBI) that a period of three months would be granted to finish the ongoing probe into stock manipulation by Adani group. The entire probe had unfolded because of the harsh allegations made by the American short-seller Hindenburg in their report infamously termed as the Hindenburg report.
The bench led by Chief Justice of India Dr Dhananjaya Yeshwant Chadrachud and also comprising Justices PS Narsimha and JB Pardiwala reverted to this case after a gap of almost two months after it had asked market regulator and an experts’ panel to review the case before putting forth their judgement. Congress general secretary Jairam Ramesh also posted on his twitter handle stating that, “Supreme Court has given time till August 15th for SEBI to submit its report on the Adani Group.” Congress has been consistently putting pressure on the government while demanding for a Joint Parliamentary Committee probe to look into the accusations that have been hurled on the Adani group by Hindenburg.
If we look at it from the business aspect, shares of 10 Adani group firms have managed to recover from the initial February lows, but are still down 49 per cent from January 24 level, which was the day when US-based short seller Hindenburg Research made severe allegations against Adani group. The Hindenburg report led to over $140 billion in value erosion in the 10 listed Adani Group companies earlier this year. The Adani- Hindenburg row will continue as more allegations have surfaced which have led to numerous controversies. As for now, the next Supreme Court Hearing has been scheduled for 15th May,2023 due the constant pleas of SEBI for an extension of time.