In a situation where the stock market is going through crisis phase, economist and author Professor Vikas Singh has given WION ways to safeguard small investors from future crises similar to the Hindenburg-Adani episode.
Mumbai: Recently, there has been a slump in India’s stock market, and guess who’s caught up in the eye of the storm again? Yes, it’s the Adani Group. The latest twist in the tale involves a revealing report by Hindenburg Research. But here’s the kicker, the Securities and Exchange Board of India (SEBI), India’s capital market watchdog, is purportedly implicated in this as well.
The accusation stands strong from Hindenburg Research, a US-based short-seller, who believe that SEBI’s top boss, Madhabi Puri Buch and her spouse, Dhaval Buch, have their fingers deep in offshore investments connected to the Adani group.
Market Reaction To Hindenburg-Adani Case
Contrary to all attempts made to quell the allegations, the stock market took a hit. On the morning of August 12, shares of Adani Group came down by a substantial 7%. While the stocks made a minor comeback by the day’s end, it wasn’t enough to soothe the nerves of investors. The damage had already been done, costing approximately Rs 530 billion, which is nearly $6.31 billion. If one were to take a wider view of it, the market’s reaction to the 10 stocks of the Adani group was quite brutal, wiping off Rs 16.7 trillion or around $198.89 billion.
In a situation where the stock market is going through crisis phase, economist and author Professor Vikas Singh has given WION ways to safeguard small investors from future crises similar to the Hindenburg-Adani episode.
- Early Warning Systems: Proactive monitoring of market anomalies and financial irregularities to identify potential red flags.
- Enhanced Disclosure Requirements: Mandating more detailed and transparent financial reporting by listed companies.
- Independent Audit Scrutiny: Strengthening the role of auditors and imposing stricter penalties for misconduct.
- Investor Education and Awareness: Empowering investors with financial literacy to make informed decisions.
- Investor Compensation Funds: Establishing a mechanism to compensate investors in cases of fraud or market manipulation.
- Strengthened Regulatory Powers: Granting regulatory bodies wider authority to investigate and penalise market misconduct.
- Crisis Management Protocols: Developing clear guidelines for handling market crises to minimise investor panic.
Congress Demands Resignation Of SEBI chairperson
The Congress on Saturday cited a media report which flagged alleged conflicts of interest against SEBI chairperson Madhabi Buch and said her continuance as the head of the capital markets regulator is “untenable”.
The opposition party said Buch must resign and a full Joint Parliamentary Committee (JPC) investigation must be conducted into the Adani “mega scam”.
Congress general secretary in-charge communications Jairam Ramesh cited an article by The Morning Context which raises issues of Buch’s alleged conflicts of interest.
The media report raises questions such as has Buch recused herself from all matters involving companies that private equity firm Blackstone has a stake in and how many Blackstone companies find a place on that recusal list.
(With inputs from agencies)