An Open Letter to Ms Madhabi Puri Buch, Chairperson and Board of Directors, SEBI

Dear Chairperson Ms Madhabi Puri Buch/SEBI Board of Directors,

Subject: Three Questions for SEBI

India’s respected market regulator is making a fool of itself by allowing the Bharatiya Janata Party (BJP) to blame a “ foreign hand” in the name of 94-year-old George Soros for the expose done by Hindenburg on the Adani Group. You and I both know that it is ridiculous. Next, they will accuse Taylor Swift. You need to tell the BJP, which is understandably anxious because the needle of suspicion goes to the very top of their leadership, to take a Baba Ramdev deep meditative breath, and calm down. Some of you are bright talented professionals and bureaucrats there; why are you allowing the BJP to damage your reputation? They are a political party who have mastered the art of lies and bluster. Your task is to tell the truth to the people of India.

There are three innocuous questions for the SEBI Board though:

1) Forget Hindenburg completely, but pray tell me, when Mr Adani’s net wealth increased from $4.5 billion in 2014 (when the National Democratic Alliance (NDA) came to power) to $11 billion in 2020, and then skyrocketed dramatically to $76 billion in 2021, before shattering all rational theories of economic forecasting to reach a staggering $150 billion in 2022, you thought that was business as usual? The absurdity and atrociousness of the dizzying prices of stocks should have led to a Suo motto investigation on share price manipulation by SEBI. The Board of Directors of SEBI need to explain their striking disinterestedness in the dazzling growth of Adani group’s market capitalisation, especially given their alleged cozy relationship with the Modi government.

2) In 2022, just 7 Adani Group companies accounted for a bizarre 80% of BSE listed companies market capitalisation growth. Even a first-year tyro doing a bachelor’s in commerce would have said: Whoa! Ye Kya Ho Raha Hai (what’s happening)? But SEBI thought that the disproportionate share of a group’s role in share price growth did not deserve a high-powered public scrutiny? Seriously? You think anybody will buy that? It did not bother you to look at some P/E multiples within an industry group? Let me tell you what you missed or evidently ignored 🙁 Adani Power PE was 769 while Tata Power was trading at 34; Adani Gas had a PE of 747 while its rival Indraprastha Gas was at 17. Please read their Annual Reports; no financial parameters justified this). The hard truth, it appears, is that you all slept through a brazen manipulation of the markets, abdicating your responsibility altogether. Hindenburg raised red flags; but SEBI drawing a blank on investigations after more than one year in a world of KYC and electronic funds transfers with permanent digital trails is like saying: We need proof that Paris just hosted the Olympics.

3) Were you under pressure from the Finance Ministry or the PMO to either go-slow, sandbag or thoroughly dismantle the Supreme Court monitored probe on overseas tax havens investing in Adani stocks, because it would have brought the house of cards tumbling down? Were you the puppets on a string? If that is so, you should speak up.

Your transparent response to the above will help. Sunlight, is after all, the best detergent.

Thank you,

Sincerely,

Sanjay Jha