Adani-Hindenburg Issue : PIL In Supreme Court Seeks To Declare 'Short Selling' As Offence Of Fraud, Probe Against Nathan Anderson

Update: 2023-02-03 10:01 GMT

In the wake of the Adani group shares taking a beating in the stock market following the publication of a report by US-based short-selling firm Hindenburg Research, a PIL has been filed in the Supreme Court.

The petition filed by serial litigant Advocate ML Sharma seeks to declare 'short-selling' as the offence of fraud. He seeks investigation against Nathan Anderson, the founder of Hindenburg, "for exploiting  innocent Investors via short selling under the garb of artificial crashing".

The petitioner further seeks that the turnover of short selling with penalty must be recovered from Anderson to compensate the investors.

"Whether intentionally short selling to crash stock in share market to square up via crashing market value via concocted artificial means is not a fraud punishable u/s 420 & 120-B of IPC r.w. 15HA SEBI Act 1992", the petitioner asks in the petition.

"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 petition states.

It was on January 24 that US-based Hindenburg published its report accusing Adani group of widespread manipulations and malpractices to inflate its stock prices.  Adani Group refuted the allegations by publishing a 413-page reply and even went to the extent of terming it as attack against India. Hindeburg shot back with a rejoinder, saying that 'fraud cannot be obfuscated by nationalism' and stood by its report.

Since the publishing of the Hindeburg report, Adani shares have been nosediving in the sharemarket. The embattled group was also forced to recall its FPO, with the tumbling down of stock prices.


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