oppn parties The Hindenburg Effect

News Snippets

  • Delhi chief minister Arvind Kejriwal, referring to a spate of FIRs for putting up posters in Delhi which said "Modi Hatao, Desh Bachao", said that even the British did not act in such manner
  • The 2023-24 Appropriation BIll, which allows the government to spend Rs 45 lakh crore in the fiscal, was passed by Lok Sabha in 9 minutes without any discussion
  • Sources say that Amritpal Singh fled to Haryana and may now be in Uttarakhand
  • Experts say that Rahul Gandhi's disqualification from Parliament will kick in immediately as the conviction has not been stayed
  • Tatas to invest $2bn in super app Tata Neu
  • Chief Economic Advisor V Anantha Nageswaran has said that inflation will drop as commodity and food prices have fallen
  • Government will define quality norms to ensure better 5G service
  • Stocks tumble again on Thursday after two sessions of recovery: Sensex loses 289 points to 57925 and Nifty goes down by 75 points to 17076
  • Amicus curiae and senior advocate K V Vishwanathan has told the Supreme Court that the changes made in law and three extensions given to the present director of Enforcement Directorate are illegal and will imperil the integrity of the agency
  • Supreme Court says it cannot judicially direct the government to acquire land or buildings near the court for advocates' chambers
  • ISSF Cup shooting: Indian pair of Rhythm Sangwan and Varun Tomar win silver in 10m sir rifle mixed team event
  • WPL: UP Warriorz take on Mumbai Indians in the Eliminator today. The winner will play Delhi Capitals in the finals
  • World Boxing: Four Indians - Nikhat Zareen, Nitu Ghanghas, Lovelina Borgohain and Saweety Boora - enter the frinals in their respective category
  • Bombay HC imposes costs and dismisses a petition by a housing society that sought to have a community-wise cap on residents
  • Delhi Police files 159 FIRs for defacement of public property and 49 for posters saying 'Modi Hatao Desh Bachao'
Rahul Gandhi disqualified from Parliament, Wayanad Lok Sabha seat declared vacant
oppn parties
The Hindenburg Effect

By A Special Correspondent
First publised on 2023-02-06 09:44:56

A report in The Economic Times says that the Adani group is moving to pre-pay its loans against shares at the shareholder level and seeks to liquidate this accounting head in 30-45 days to reassure the market that the group is capable of repaying its loan commitments. The quantum of such loans is in the range of Rs 7000-8000cr and they have mostly been availed through foreign banks like Credit Suisse and JP Morgan and Indian NBFC J M Financial.

Although this is a move in the right direction, it will not be enough to soothe market sentiments entirely. Along with the capacity to repay loans, both of the promoters and the group companies, the questions of accounting malpractices, corporate governance and rigging of share prices through related entities need to be answered satisfactorily by the group for it to regain some of the ground it has lost in the markets due to the Hindenburg report disclosures.

Although Hinderburg is currently under investigation by the US Justice Department, along with its associate Nate Anderson and several other activist short-sellers who have been targeting Chinese firms for many years and who are now after Indian firms, that news will provide little solace to Gautam Adani. Writing in The Times of India today, Arvind Panagariya has good advice for Indian firms who will now be increasingly targeted by US-based short sellers - superior standards of transparency and corporate governance. There is no substitute for being honest - both with the disclosures and with the numbers.

With Indian firms increasingly borrowing in the global market, any laxity in disclosure norms or alleged manipulation of stock prices will not make funds available to them and will also render them vulnerable to Hindenburg-type attacks. The regulators in India must step up their vigil and ask pointed questions to company managements and take other corrective measures if share prices move beyond acceptable limits as defined by normal parameters or the price earnings ratio of a firm jumps up unreasonably in a short period of time . The Adani fiasco must result in Indian firms getting their act together so that they are not targeted by US-based short sellers.