A plea has been filed in the Supreme Court by advocate Manohar Lal Sharma seeking a direction to the Centre and Sebi to inquire into an alleged "criminal conspiracy" behind the Hindenburg report on the Adani Group that resulted in a stock crash and caused huge losses to investors.
The petitioner claimed that resident of the US, Nate Anderson of Hindenburg Research, and his Indian entities hatched a criminal conspiracy and carried out a short sale worth hundreds of billion dollars prior and thereafter on January 25, 2023, when they released concocted news as a research report qua to the Adani Group of the companies, and squared up their short sell position at the lowest rate.
"They secured billions of profits by butchering citizen of India. However, Sebi did not suspend trading in the stock specially qua to the Adani group of the companies and allowed short sellers to exploit innocent investors," the plea alleged.
The petitioner raised legal questions whether Sebi was not duty bound to suspend trading in the short selling stock to protect investors and whether intentionally short selling to crash a stock in share market to square up through concocted artificial means is not a fraud punishable under Sections 420 and 120-B of IPC along with the provisions of the Sebi Act.
American short seller Hindenburg Research's report about Indian billionaire Gautam Adani has led to a stock rout, erasing over $100 billion from his empire and pushing him down on the global rich list.
In its report, five-year-old Hindenburg Research accused the Adani Group conglomerate of being involved in accounting fraud and "brazen stock manipulation". The Adani group rubbished the allegations.