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Short selling and activism don't go together

Contrary to the rationale of short selling, third-party investigative reports from activist short sellers violate Sebi regulations

File photo: PTI
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File photo: PTI

C K G Nair & M S Sahoo
The Adani-Hindenburg saga has created volatility and waves of uncertainty in the markets. While the media has been proactively covering the story, this article explores the propriety of investigative disclosures by a short seller, leaving the jurisdictional question aside. The commentary is not on the merits of the “investigation findings” covered in the Hindenburg report.
 
The underpinning theoretical support for short selling is premised on its ability to correct market distortions such as overvaluation (bubbles) of securities. Therefore, the regulatory and market justification for allowing short selling is founded on the play of the market forces. Some investors may short
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Mar 29 2023 | 10:00 PM IST

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