Hindenburg Research: A Machiavellian design to perpetuate a failed narrative of self-doubt and instability

Since the time immemorial, businesses have nurtured intricate connections with the political establishments of the time. Their powerful influence on politics runs at different levels – ?exerting the pressure on framing favorable fiscal, trade and industrial or even foreign relation policies, related laws and regulations being the most ostensible context. What is always attempted to be kept behind the public eye is that businesses are the largest source of funding in politics, and invariably enjoy disproportionate clout in policy-making and the overall functioning of governance machinery. The term cronyism (or, crony-capitalism – seemingly originated in South East Asian countries to signify the pattern of family members of the ruling leaders becoming obnoxiously wealthy without any credible basis) or, its indigenous version of Briefcase or Suitcase Raj - turbo-powered on License-Permit-Inspector Raj – conveys the contraption with any extra explanation.

The motivation of political contributions in times of Bhamashah and Jagat Seth

In old times, wealthy merchants and traders used to fund the military campaigns of the rulers. Such campaigns will invade and capture new territories, which in turn will open new vistas of gainful trade and commerce activities for the merchant class besides providing a freeload of pillage and plunder. Invariably, loosening of the purse strings by influential merchants will also have its layers of shenanigans full of conspiracies and machinations. Who forgets the story of the fabled richness of Jagat Seth (Mehtab Chand) of Murshidabad and his treacherous plot to fund the East India Company in the Battle of Plassey? The pages of history suggest that the conniving merchant family became part of the conspiracy against Siraj-ud-Daulah – the new Nawab of Bengal. Aggrieved by a demand for higher tribute, Jagat Seth family funded the East India Company in the war exercise to change the ruler and regain their lost clout of tax collection, dealing of coinage and foreign currency and treasury arrangements. At the other end, we have also the story of Bhamashah - the Nagar Seth of Chittor. ?Bhamashah and his brother Tarachand not only generously funded the long-drawn campaigns of Maharana Pratap against the Mughal from their wealth but also attacked Mughal camps to mobilize new resources.?

Self-proclaimed champions of democracy and global order: Fishing in the troubled order

In present times too, businesses bankroll the campaigns of political parties and politicians. ?Of course, such political contributions are meant to run electioneering and nurturing (appeasing?) their constituencies and vote banks - with an unstated intent of currying the favour after the election under a friendly regime. Moreover, in an intensely globalized business ecosystem with a complex structure of international capital flows, the maneuvering finds its manifestation in more convoluted forms. At one end, the business interests of corporates behind multi-layered veils of the legal structure established in exotic jurisdictions can have conceivable motivation. At the other extreme, we have witnessed an odd pattern of self-proclaimed custodians – likes of OCCRP, Open Society, George Soros, Rockefeller Brothers Fund,?Ford Foundation etc. - championing the causes of democracy, liberty, transparency et al - obsessively training their guns on the polity and governance functioning in emerging and developing countries ?- including India.

Unmindful of fire in their backyards, their fixated colonial mindset of determining the world order is yet to find a right anchoring in the contemporary world realities. Operating through questionable players like Hindenburg Research and their shady affiliates in shaping the narrative and influence in the election process, at best, is a pathetic attempt. Despite their visceral dislike for the incumbent regime and public affirmation of opening the door of a self-designed democratic process (with an unstated aim to install a timid lackey of questionable character), the results of recent general elections and the new government assuming under the incumbent prime minister in India are not just frustrating to them but a tight slap in their face.

Hindenburg Research: Questioning institutional integrity, the only way to sound credible ?????

This week’s outbursts from Hindenburg Research against 27 Jun show cause notice of SEBI appeared as a much-anticipated charlatan-like response. It veered from obscurities of citation of security settings violation message to lexiconic interpretation of word ‘leniency’ and psittacism like rehashing of their lengthy Jan 2023 report (mostly repackaging publicly available information) besides listing 42 news snippets with varied narratives published during 29 Jan 23 and 21 May 2024. ?

What can be more ludicrous is that in its brazen efforts to undermine the legitimate role and authority of SEBI, the investigative research firm preferred to make a self-aggrandizing discourse of “a Wake Up Call On Corporate Governance And Regulatory Enforcement In India” by curiously citing the excerpt from PJ Thomas Report (The regulation of the stock market in India) of 1948. While sermonizing the securities market regulator about the regulatory enforcement approach, Hindenburg either completely overlooks the records of public investigations and enforcement actions of the authorities and relevant judicial pronouncements or, chooses to give a twist to suit its sly orchestrated (failed?) narrative.

Unsolicited advice to Mr. Conscience-keeper and Evangelist

In recent years, despite policy initiatives of the governments to curb tax evasion, the existence of thriving tax havens with growing illegitimate wealth size –operating in the backyards of developed countries - is a concerning phenomenon. Various estimates about money held in tax havens range between US$7–32 trillion, even the most conservative estimates indicate ill-gotten wealth size more than 10% of global GDP. These certainly do not operate to deliver some altruistic causes. An IMF report (Tackling Tax Heavens, ?Sep 2019) cites that American Fortune 500 companies alone held an estimated $2.6 trillion offshore in 2017. Mr. Conscience-keeper and Evangelist, rather than being involved in meaningless rant and rave on corporate governance, legal and regulatory systems in India, do you want to exhibit the worth of your deep analytical and investigative prowess in unhindered global empire of tax havens? For now, the Indian legal, regulatory and governmental system is more than sufficient to find its legitimate anchoring and direction to fulfill the aspirations of its people. The least, we require any superfluous sermon from any patronizing quarter of questionable antecedents.