Since January of 2023 the financial research firm ‘Hindenburg’ has reported on massive levels of financial and corporate corruption that the Adani group was engaged in especially through methods like stock manipulation and offshore accounts. What resulted from the report would be not only be significant losses for the Adani group in areas like Share prices, but a wave of conspiracy theories accusing Hindenburg of defaming the country and being a “Soros puppet” with many right wing personalities joining the global far right bandwagon on conspiracy theories surrounding the billionaire George Soros. Many figures especially critical of the NDA (National Democratic Alliance) government found themselves unsurprised at the revelation and scandal reactions, citing a history of the prime minister being friendly and soft handed with major billionaires and conglomerates.
Reactions amongst politicians have also been divided outside online discourse with many politicians especially from opposition parties requesting for an investigation into Adani from organisations like SEBI (Securities and Exchange Board of India). 18 months later on the 10th of August 2024, Hindenburg once again released a report. This time indicating a link between SEBI’s chairperson, and the head of the Adani group. Hindenburg within their report cited a lack of cooperation from SEBI and even reluctance into investigation. Before the release, citizens on social media expressed concerns that institutional independence of major watch dogs like SEBI especially in corruption cases have been compromised and there was an exodus of competence from watchdogs to even investigate. Recent allegations of sensationalism from SEBI furthered suspicions surrounding the controversy.
The case with SEBI however isn’t the only institution nor the only time where an institution has actively been observed to be reluctant in investigation or ensuring transparency in the worlds of finance, business, and politics. During March of 2024, the supreme court refused to give more time to SBI (State Bank of India) in the release of data and numbers surrounding the electoral bonds scheme in what it saw as reluctance to investigate or cooperate. What followed was knowledge about the significant discrepancies in party funding with NDA parties like the BJP (Bharatiya Janata Party) having 56% share in anonymous electoral bonds between 2018 to 2023. And as far back as 2014, many financial watchdogs have stopped investigating companies due to either pressure or purchasing of news outlets. The purchase of the watchdog to many analysts is a sign of a more dishonest environment in terms of research and even a hostile environment to whistleblowers and investigation.
The recent reactions to Hindenburg from SEBI and from observers proves that when it comes to whistleblowers and investigating corruption, institutional independence is vital to ensure honesty in business environments. The lack of honesty for many countries like Brazil back in 2014 had led to scandals like Lava Jato (Operation Car Wash) and in the process, devastating local economies. It is crucial that India doesn’t turn a blind eye towards institutional independence to ensure transparent business environments rather than default to allegations of defamation.
Image Courtesy: https://www.bbc.com/news/articles/cx28y2wwqyko
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