Tormented Tycoons: A Tale of Two Cities

Travesty of Market Capitalization

In securities markets, #marketcapitalization #MCap of the listed companies is the most treacherous zone beyond confines of fundamental factors – temperamentally exhibiting behavior of a servile handmaiden to medley market vagaries, and completely disconnected with theories of Economics and Finance. In a world swamped with issues of dichotomy and discord of many hues, it requires more than academic mooring to grasp the contrasting shades of influences to analyze the confounding intricacies of events taking place in the #financialmarkets. Visible splashes of schism and paranoia aside, events as occurring have more than often less visible actors, who pull the strings to orchestrate the scripted narrative with great aplomb. In the matters relating to the issues of national economy, business interests and corporate dominance, the shrill and skepticism is bound to be intense, yet full of conjectures and naiveté idealism from different quarters. In recent period, two of leading business tycoons from Asia – characterized for their self-made persona and aggressive entrepreneurial stance, faced an unusual roadblock as a part of their thriving business journey.?They coming under vicious attack was as unprecedented as the unexpected credentials of their tormentors – in one case peeved regulatory and government authorities, in other case an ostensible short-seller propped up by purported vested interests.??

Market Economy and Regulatory Architecture

It would be a subject of intellectual debate whether crony capitalism (or its variations and contra construct) is a malaise singularly associated with a particular political stripe of the #governmentalsystem. Or, for that matter, what form of #regulatoryarchitecture matters most in deliverance of public goods - anachronistic or arbitrarily stifling versus acute regulatory laxity or an extreme of apathetic laissez faire. One thing is certain, putting a spoke in entrepreneurial wheel indiscreetly with a motivated intention has its own cost and consequences – almost throttling the animal spirit of an economy. The ensuing confusion and uncertainty along with abrupt loss in market value is borne by the wider investors - proxying for the entire economy, not a single corporate entity or business group alone. Mind it, it is no way being propagated to overlook or condone any misdeed of corporates, or take a lenient view by giving a rap on the knuckles for serious wrongdoings. Some of basic tenets of regulatory oversight and control mechanism – i.e., principle-based, fact based, timeliness, transparency, natural justice, proportionality of penal provisions remains fundamental requisites. But what happens to those delinquent detractors with spit and scoot attitude obsessed with indiscreet lust of profiteering somehow from the motivated campaigns.

Tormented Tycoons

Market observers may recall, abrupt suspension of dual listing of #JackMa promoted Chinese fintech #AntFinancial (affiliated with eCommerce giant #Alibaba) in Nov 2020. Its market float could have easily established as the largest ever IPO of ~ $37 billion in global financial markets history. Jack Ma’s public remarks in Shanghai Bund Summit about regulatory stifling annoyed the regulators so much that it led to intensified crackdown along with series of penalties under different counts. While there is indication of conclusion of regulatory clampdown now, it has already caused a deep affliction. By some estimates, combined loss of market capitalization for Ant and Alibaba exceeds $850 billion – reckoning the peak value of Oct 2020.

In comparison, #AdaniGroup coming under attack from a nondescript research firm - #HindenburgResearch, alleging stock manipulation, related party transactions and accounting fraud, while taking an aggressive short position of undeclared size in Adani Group Companies through U.S.-traded bonds and derivative instruments. While it led to free-for-all political hullaballoo and charges of group’s proximity with the government, findings of multi-level investigations so far – including Supreme Court appointed expert committee and the market regulator clearly throws enough early indication - did the allegations in the first place really hold water? Meantime, campaigners of crying wolf have already succeeded in inflicting a deep damage exceeding INR 9 trillion to the market capitalization of group companies.

Amid untold twists and turns, the bigger question remains lingering in both the eye-opener episodes, who is having the last laugh and at whose expense?