Do not undermine the credibility of investors

US-based stock market research firm Hindenburg has again created a stir in India by coming out with a new revelation of fraud in the country's financial sector. This is the second time in two years that Hindenburg has released such a report. The first report was that Gautam Adani's Adani Group, which has a significant influence on the country's economy and governance, created paper companies abroad and artificially inflated the share prices of its own companies in India. The report also said Adani Group made financial gains again by using the shares that had risen in price. The report created a big controversy. There was a depreciation of more than 10 lakh crore rupees in the stock markets in India. Gautam Adani's billionaire status also fell. The new report is a continuation of this.

Also read: Hindenburg report on SEBI chief: Centre downplays it, BJP blames Cong for economic instability

Regarding the first report against Adani, the Securities and Exchange Board of India - 'SEBI' - which is responsible for monitoring the transparency and efficiency of the capital market and protecting the interests of investors, defended Adani and took a favorable stand, including in the Supreme Court. Hindenburg was given notice. Adani's interests were completely protected. Although Hindenburg has profit interests such as short selling, the information released should be taken seriously.

Also read: Rahul Gandhi 'bitter, poisonous & destructive': BJP MP Kangana Ranaut

The new report unravels the inside stories of the policies adopted by 'SEBI'. According to the new report, SEBI's chairman Madhabi Buch and husband Dhaval Buch have investments in overseas paper companies linked to the Adani Group. While Adani, SEBI, and Madhabi have all denied the news of the investment, Hindenburg is releasing more evidence. Hindenburg has also accused Madhabi Buch of illegally holding shares in her husband's company. In 2018, Madhabi Buch, a full-time 'SEBI' director, was appointed as the chairperson by the central government in 2022. The central government's interest in the appointment is under a cloud after the new report came out. The stance taken by the Centre and SEBI in the serious allegations leveled against the Adani Group last year is also being questioned. The BJP spokesperson's response to the allegation against Adani, one of the thousands of corporate companies in India, points to an unholy collusion. The allegation against the chairperson should be answered by SEBI or the government, not the BJP.

Also read: Hindenburg's new revelation! Sebi's chief, husband had investments with Adani

India's capital market is growing day by day. Tens of thousands of newly opened demat accounts every month are proof of this. A large amount of capital is coming into the market from domestic investors. This is why the national stock price index Nifty and the Bombay stock price index Sensex have all risen phenomenally in the last five years. This is why the Indian market has not been affected to a great extent despite foreign investment institutions withdrawing their investments en masse due to various reasons such as war, opportunities in other countries, and interest rate hikes in the US.

Also read: Hindenburg revealations! Adani stocks crash up to 17 per cent

The report against the 'SEBI chairperson raises serious concerns among investors and the financial sector. The report alleges that the umpire or referee, who is tasked with monitoring fouls and irregularities in the match, has taken a one-sided position. The Centre, Madhabi, and Adani are making the usual argument that the report is meant to destabilize India. The Centre should be ready to keep Madhabi aside and address investors' concerns, and thereby to regain credibility. Lack of transparency in the financial sector can cast doubt on entire institutions. It may also lead to financial collapse. Not only in the financial sector but in any field, when frauds and irregularities come to light, there is a tendency to cover them up in the garb of patriotism and national security. If the accused are of interest to the government and the ruling party, those who reveal the fraud are sure to be charged with treason. However, lately, it has become increasingly clear that the truth cannot be hidden forever. At the same time, what any government with any remaining transparency should do is not to wait for the truth to come out but to convince the people of the facts as soon as possible.

Also read: Hindenburg report over Adani: SEBI issues showcase notice