Billions of dollars were wiped off at the stock market while SEBI remained a mute spectator
It is not about the Adani Group or Hindenburg report but about the national regulator of the stock market, the Securities and Exchange Board of India (SEBI) which has the primary duty to ensure that the stock market functions smoothly and the investors’ money is not swindled by the scamsters. The recent stock market crisis over the last ten days clearly demonstrates the failure of the regulatory body to perform its responsibilities with transparency and diligence. It slept over as billions of dollars were lost in the market in the Adani Group shares and hundreds and thousands of investors saw their fortunes plummeting. Many a time the top performing Shares of Adani group hit the lower circuit while the SEBI did not bother to even come up with a statement assuring that it was in control of the situation and that the market would correct itself soon. It was all happening after the short seller Hindenburg Research, a US-based short-selling firm released a 106-page report on the Adani group, calling it the biggest scam in history and claiming that the Adani Group has indulged in stock manipulation and skirting the Indian laws (which SEBI is supposed to protect) by floating over 40 shell companies working from Mauritius and other countries which bought the Adani shares working on modus operandi of ‘pump and dump’ the stocks.
The investors saw their life-saving wiped off in days while the designated protector remains a mere spectator as if its hands have been tied and mouth zipped? After ten days when this all began, SEBI came up with a press communique saying that it would step up the surveillance and that it was observing the developments, market was not convinced. Not a word about the Adani Group or how it has lost billions of dollars on the stock market which might tank several public sector banks which had generously lent it the money or the LIC which has exposure worth thousands of crores in the Adani Group. Even the overvaluation of the Adani Group did not raise SEBI's eyebrows. It did not bother to take cognizance of the fact that most of its stocks were trading several times their intrinsic values and that most of the growth had come during the pandemic when most stocks were in the red. It is about time SEBI should become proactive and at least bring about some semblance of order in the stock market else there is a real danger of foreign investors losing faith in the Indian stock market.