The Adani clout

The Adani clout

How Share market is being manipulated

By

Faraz Ahmad

We all vaguely know of some manipulation of the stock market by the powers that be but don’t have a clear idea how it works. But a report appearing in the Indian Express of June 5, 2015 showed how the stock exchanges countrywide  are being manipulated to surreptitiously aid the Adani business conglomerate. Now it is no secret that there is a special bonding between Prime Minister Narendra Modi and Gautam Adani. The stock exchanges have obviously been manipulated by Adanis to pinch the rupee from gullible investors but not without the tacit or blas’e support of the Modi government.

The matter came to light when the Investors’ Grievances Forum (IGF) lodged a formal complaint with the Securities and Exchange Board of India (SEBI)alleging that the investors suffered heavy losses in the shares of Adani Enterprises on June 3 as the Stock Exchanges did not follow the rules and established practices…

In a statement issued later the IGF explained that, “Shares of Adani opened at a whopping high of Rs 537, touched a low of Rs 116 and was trading around Rs 120… a large number of gullible innocent investors (being not aware of the adjustment after demerger or having no knowledge of the cunning way in which Exchanges were allowed trading of shares of Adani Enterprises) who have bought shares at higher prices have been trapped resulting into the investors’ losses.

“The fair value of the shares is not more than Rs 120 and as such the trading should not have been allowed at the maximum of Rs 120 per share or special session should have been called for the purpose of determining fair value of the shares through the price discovery mechanism, the IGF said.

The report explains that on June 3, shares of Adani Enterprises were listed as a demerged company having hived off its Port, Power, Power Transmission businesses. In the normal course the Adani shares should have been allowed trading at an adjusted price considering the hiving off of its businesses into separate companies. But in this case the necessary prerequisites were wilfully given a go by by the Exchanges, alleged IGF president Kirit Somaiya.

“I discussed abnormal movement of demerged shares of Adani with the Finance ministry, said IGF Somaiya, the BJP MP from Mumbai. Somaiya is no ordinary MP of the Bharatiya Janata Party (BJP). Originally a Share Market agent Somaiya has been in the forefront of exposing “corruption” of all BJP adversaries be it the Congress, the BSP in UP or RJD in Bihar. Conversant with the world of trade and business, Somiaya is despatched by the BJP on all the missions where the BJP seeks to expose corruption of its rivals and make a political capital out of it.

And the close relations between Gautam Adani and Narendra Modi are no secret either. Then the problem must really be very deep to trouble Somaiya so much as to go public about Adani’s misdemeanour.

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