Adani-Hindenburg case: Finance Minister Nirmala Sitharaman talks about short-selling & regulatory bodies

Finance Minister Nirmala Sitharaman in an exclusive interview to Economic Times spoke about short-selling and Indian regulatory bodies in view with the Adani-Hindenburg case. This comes as reports about an upcoming investigative report on an Indian corporte emerged.

Sitharaman highlighted that short-selling is a practice where individuals or entities strategically take positions to manipulate the valuation of a target company. She added that the practice involved lowering the valuation and subsequently driving it up, leading to significant profits for those involved. As per Sitharaman, the short-sellers meticulously analyse corporate entities to assess the feasibility of their strategies and assume calculated risks to achieve substantial gains.

Also Read: George Soros backed Global investigative journalists collective plans exposè on Indian company

Sitharaman also noted that different intentions are involved while practising short-selling. She mentioned that while some use the tactics to exploit market dynamics for profit, others opt for similar strategies to capitalize on market fluctuations.

As the accusations on the Adani Group by Hindenburg report still lingers, FM Nirmala Sitharaman shed light on how the regulatory bodies could function to discern the genuine concerns from manipulative actions. She expressed optimism that effective use of regulatory tools could contribute to enhanced corporate governance, benefiting India's economic landscape.

"What I'm looking at is Sebi, with what it does, is able to see from the grain from the chaff. Regulatory tools, if used properly, coming out of this can lead to better corporate governance. There is no harm if India can also benefit from better corporate governance", Sitharaman told Economic Times.

She also mentioned that government intervention might not be effective in controlling these activities as this happens regardless of regulations. She went on to say that constructive outcomes could be derived from reports and activities related to activist short-selling, ultimately leading to better corporate governance.