by Rajesh Kumar Sinha 18 February 2023
The Indian political and media landscape has been agog with all sorts of stories, true or otherwise, innuendoes and conspiracy theories since the Hindenburg Research report published on India’s Adani group a few days ago. While on the one hand, it suggests that there might have been illegalities on part of the Adani group, question marks have also been raised about the Hindenburg itself and its motives beside the timing of the report.
It is true that Adani group like all corporates around the world including the well-known MNCs from the US, Europe, Japan and India, may well be scrutinized on its dealings and capital market volatilities, including manipulation of existing regulatory and legal loopholes. A demand for greater transparency on that account from the corporate is something that nobody can really question.
What however raises serious eyebrows is the background of the accuser Hindenburg and the manner, its so-called research report is being used to settle scores on political and corporate fronts. To begin with Hindenburg does have a dubious reputation in its home country, US. It has indulged in this sort of practice before against conglomerates and faced legal challenges on that account. As a short seller, it has used it to bring down the market price of big, popular stocks and made huge profits, short-selling them.
Media reports have confirmed that post-meltdown of Adani stock prices on account of Hindenburg report, this company of Anderson has made huge financial profits without investing any money. So subsequent to the publication of so-called ‘opinion’ of Hindenburg Research, it is beyond any doubt that this short-seller from the US has been the beneficiary.
While motive of Hindenburg is very clear, a look into its background also requires careful scrutiny. Why and how, it has been debarred by the US Justice Department to publish any report on companies listed in the NYSE. Had there been no hanky-panky, would’nt Hindenburg has explored legal remedies against this action.
Also, the owner Nathan Anderson an ambulance driver in Israel, set up Hindenburg as an activist short-seller in 2017. The company has had an unenviable track record in merely five years of activist life wherein it faced a lawsuit from a Chinese company, barred from publishing reports on US Companies and what many perceive, carried out a mercenary job against Gautam Adani, the third richest individual in the world till a few days ago. It would be interesting to find out how come a man with such background qualify to do forensic audit of world class corporate who in any case have to undergo rigorous statutory regulations and round the year scrutiny of auditors, state regulators and media.
Further, media reports have also suggested that Henderson Research has a staff strength of 9-10 only. Given that automation and internet has made many jobs redundant, yet expecting a company that claims to do forensic audit (?), does’nt that claim sound incredible and preposterous. Also, unlike all other companies, Henderson does not provide us with its contact details and offers ‘getting in touch’in response to a request. Do all such ideas suggest any bit of transparency that it seeks from Adani group?
In addition to questionable motive and credibility, the question of timing is also of essence. Politically, Indian PM Modi continues to be very popular in the country and globally remains a powerful international leader (Morning Consult (US) 2023 ranked him as the most popular world leader with 78 percent approval rating). None of the opposition leaders in India are a match for him and with elections 2024 already playing up, they including principal opposition party, Congress are desperate to put all kind of slur on Modi.
Interestingly, they do not have anything to corner Modi on governance except his less-than impressive track record on employment. The economy, contrary to predictions by armchair Indian economists sitting in the west, is doing extremely well, inflation/fiscal deficit is within limits, 80 million being offered free food, a host of insurance and health subsidies, fast expanding world-class infrastructure, impressive exports and broadly honest administration; all such facts have made Modi even more confident in his endeavor for a straight third-term.
In such a scenario, projecting Modi as supporting one of the world’s richest Adani, spreading disinformation that his loans from Indian biggies like State Bank of India (SBI) and Life Insurance Corporation of India (LIC) could ruin savings of Indian poor/middle classes, the opposition politicians, especially Rahul Gandhi (Congress) feels could open up space for a virtually non-existent political competition against Modi. No wonder, same brand of politicians/media in India Rahul Gandhi (INC), Mahua Mitra (TMC), Akhilesh Yadav (SP), The Wire, The Hindu, The Telegraph along with chosen anti-Modi international media have upped the ante against Adani, suggesting that the Indian Government is protecting Adani illegally.