Source: https://economictimes.indiatimes.com/news/india/view-india-cant-afford-to-get-the-adani-affair-wrong/articleshow/97469688.cms
View: India cannot afford to get the Adani affair wrong
By Mihir Sharma, Bloomberg
It looks as though the Adani Group’s attempt to wrap itself in the Indian tricolor and see if criticism bounces off the flag may succeed. If the Indian government becomes a participant in the conglomerate’s effort, however, it would be doing itself and all Indians a great disservice.
In its rebuttal to short-seller Hindenburg Research’s claims of stock manipulation, tycoon Gautam Adani’s company made its strategy clear: Hindenburg’s accusations were, said Adani, “a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”
In its rebuttal to short-seller Hindenburg Research’s claims of stock manipulation, tycoon Gautam Adani’s company made its strategy clear: Hindenburg’s accusations were, said Adani, “a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”
This is, of course, not true. Hindenburg Research is not part of a giant conspiracy to defame Adani, the Indian economy, or Prime Minister Narendra Modi. The company is a small, respected, New York-based shop of short-sellers that thinks it recognizes the signs of overvalued companies ripe for a selloff.
The possibility of profit is enough of a motive — you don’t have to reach for theories about a transnational network of anti-India bankers and journalists.
Yet there is one grain of truth in Adani’s claim, and it should worry Indian policymakers. Hindenburg’s report, which describes a web of offshore shell companies engaged in possible related-party transactions, refers to investigations by the relevant Indian regulator, the Securities and Exc ..
The short-sellers make a strong, and possibly overstated, claim about the possible outcome of a regulatory investigation: “Offshore shells and funds tied to the Adani Group comprise many of the largest “public” (i.e., non-promoter) holders of Adani stock, an issue that would subject the Adani companies to delisting were Indian securities regulator SEBI’s rules enforced.”
The report goes on to claim that the companies are still bein ..
The report goes on to claim that the companies are still bein ..
It isn’t only Indian regulators who need to ensure they address these doubts head-on. This is a crucial test for India’s market economy. Policymakers in New Delhi still have extraordinary influence over the nuts and bolts of India’s economy, if in ways that are not immediately obvious to outsiders. State-run banks dominate lending to companies. The Life Insurance Corporation of India, a public sector insurer, is the most influential domestic equity investor. If it and other state-run institutions appear to come to Adani’s rescue now, without credible justification, who will believe in the future that India’s government doesn’t have a thumb on the stock-market scales?
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India’s regulatory reputation is on the line. This is the one thing that has set us apart for three decades, since SEBI was first set up in response to our first big market manipulation scandal. It is something we as Indians should be proud of and should fight to defend....
India’s regulatory reputation is on the line. This is the one thing that has set us apart for three decades, since SEBI was first set up in response to our first big market manipulation scandal. It is something we as Indians should be proud of and should fight to defend....
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