New Hindenburg Allegations Aimed At Slowing Down Bullish Market Sentiments, Say Experts

The fresh allegations from US-based short seller Hindenburg Research, which target high-profile figures, are a potential maneuver to temper the prevailing bullish sentiments in the stock market, according to experts.

The report claimed that the chairperson of Securities and Exchange Board of India and her husband had stakes in offshore entities involved in the alleged Adani money siphoning scandal.

The Sebi Chairman and the Adani Group, however, have labelled these allegations as "baseless" and "malicious". Madhabi Puri Buch has also pointed out that the latest release by Hindenburg comes after SEBI took enforcement action and issued a show-cause notice to them in July.

This report "is aimed at discrediting regulator and causing chaos and losses in markets for investors — thus slowing down bullish sentiments," Former Union Minister Rajeev Chandrasekhar said in a post on X.

India's corporate governance standards are far better than many developed nations, according to Vikas Khemani, founder of Carnelian Asset Management & Advisors. "People who preach us governance have far more compromised markets... I am not making the point that our markets are perfect, and we don’t have issues... but every time, vested interest question India and her credibility," he wrote in a post on X.

Former Infosys CFO Mohandas Pai labelled the new Hindenburg report as “character assassination by a vulture fund.”

He took to X to express his views, writing, “Rubbish allegations aimed at sensationalism. There was a SC-monitored investigation overseen by an Eminent panel- when the vulture fund was fully exposed it throws mud.” Pai also defended SEBI’s regulatory processes, stating, “All regulations of SEBI are made after open consultations. The regulations demonstrate collective thinking of market and regulators based on global benchmarks.”

Deepak Shenoy, chief executive officer, of Capitalmind, also weighed in, describing Hindenburg’s latest allegations as lacking in substance. 

Krishnamurthy V Subramanian, who served as the 17th chief economic adviser to the Government of India, described the latest allegations as a “hit job that lacks intellectual rigor.” He backed the Sebi chairperson stating that: “I’ve personally known SEBI Chairperson Madhabi for about two decades. Given her unimpeachable integrity and her intellectual prowess, I’m sure she will shred to smithereens this Hindenburg hit job.”

Intellectual property rights attorney Safir Anand suggested that Hindenburg’s actions were driven by desperation amid a rising market.

“It is clear to me that Hindenburg is desperate against a rising market. One flop is leading to desperation to avert many consequences for them, including legal action,” he wrote in a post on X.

"They must have already shorted the market before publishing this report. Making money of people's misery," wrote Vineet Arora, managing director, NAV Capital, sharing his views on the new report.

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