PS: This post is not related to the area of Cyber Law or Data Privacy which is the professional activity of Naavi. It is linked to the national interest of India and to Information Warfare issues. I donot subscribe to the view that professionals should shy away from commenting on events of public interest and hence as a past Merchant Banker and Investment journalist who maintained a regular column in a national news paper, I consider it my duty to record my views on this subject. …Naavi
The recent Hindenburg report and the consequent developments in the stockmarkets have hurt a large number of investors in India. The stockmarket drop has hurt not only investors in Adani group shares but investors in other shares also. Hence the development is of interest to all investors irrespective of whether they are supporters of Mr Adani or not.
It is tragic to see uninformed politicians speaking about discussion of the issue in the Parliament, setting up of a JPC etc indicating that they have no idea of the stockmarket operations and what is the responsibility of the Government.
Many in the media are also sensationalizing the drop in market capitalization of Adani shares and his notional wealth coming down showing their ignorance that this has no relation to corporate performance and investor interests.
There is a primafacie evidence to suspect that the report is part of a “Anti India Toolkit” similar to the tool kits used by the opposition parties during the farmer’s agitation.
I have therefore requested SEC, USA to conduct an enquiry on the Hindenburg firm and request SEBI to lodge a formal complaint with SEC. I also urge interested public to send similar emails to SEC or raise a petition to initiate action in USA agaisnt the Hindenburg firm.
The copy of the email sent today to SEC at “Chair@sec.gov” is as follows:
The Securities Commission
I refer to the recent report of Hidenberg on the Adani Group of India alleging corporate mis Governance etc which has caused large scale financial losses to investors at large.
Hindenburg is a firm which declares itself as a “Short Seller” and earns commission from firms which profit from short selling following such reports.
Prima Facie this activity is a fraudulent activity.
Short selling by an investor on his own perceptions about the future of a stock is legitimate. But creating a report to sway the market opinion in one way is nothing different from the “Pump and Dump” fraud.
Similarly, a research report released in the interest of the investment community is a “Public Interest” activity. Obviously Hindenburg report is generated and published in self interest and not considered as “Public Interest”.
As SEC, we would like to know if it is not your duty to conduct an enquiry against Hindenburg firm and its real intentions of releasing the report and timing it to strike at the FPO of the Adani Group.
The timing related to Adani Group making progress against Chinese interests in several countries raises a question on whether this is part of an information war which is also directed against hurting the Indian economy in general.
There is an apparent possibility of this report being part of the “Anti India Toolkit” developed by the Indian politicians similar to the earlier such toolkits in which unrelated celebrities of USA were making adverse comments on the Farmer’s agitation in India.
We in India have a strong suspicion that Hindenberg report is a fraud by itself and SEC must investigate the funding of this report.
We look forward to appropriate action in this regard.
In case you feel that there is no need for SEC to conduct a preliminary investigation to determine the possibility of fraudulent conspiracy behind this report and publish it for public consumption both for US and global investors , kindly let us hear about your views.
If the possibility of fraud is prima facie established, SEC should conduct a more detailed and professional investigation like the Enron investigation and bring the culprits to book.
This is a question of the credibility of SEC.