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Among the ‘top short sellers’ identified were two Indian companies – one registered in New Delhi, while the other company is registered in Mumbai.

Income-Tax Department Launches Probe into Alleged Tax Evasion over Adani Group Short-Selling Profits | ANI

Mumbai: The income-tax department has initiated an intensive probe against several domestic and overseas entities for alleged tax evasion related to profits from short-selling shares of companies within the Adani Group, following the controversial Hindenburg Research report.

“Most of the short sellers did not report their windfall gains during the period to the income-tax department. The case is under investigation by the income-tax department as agencies have arrangements for real-time exchange of intelligence,” confirmed a senior IT official.

Short-selling of Adani Group stocks

The market regulator Securities and Exchange Board of India (Sebi), based on a report from the Enforcement Directorate, has launched an investigation, suggesting that certain entities appeared to possess prior information about the report and consequently garnered significant profits through short-selling Adani Group stocks.

The Hindenburg report alleged “brazen accounting fraud” and “stock manipulation” by the Adani Group, which swiftly rejected the report as “unresearched” and “maliciously mischievous.”

The release of the report triggered a massive decline in Adani Group stocks, leading to a loss of approximately $150 billion within days. This setback even led to the cancellation of a ₹20,000 crore share sale in the group’s flagship company, Adani Enterprises.

Delhi & Mumbai firms among top short sellers

Among the ‘top short sellers’ identified were two Indian companies – one registered in New Delhi, against whose promoter SEBI had issued an order for misleading investors and engaging in stock market manipulation; the other company is registered in Mumbai.

Source: https://www.freepressjournal.in/mumbai/income-tax-department-launches-probe-into-alleged-tax-evasion-over-adani-group-short-selling-profits

A crisis of confidence in the U.S. banking sector has led to the failure of three midsized banks since March as depositors fled from smaller banks, with calls for the Federal Deposit Insurance Corp (FDIC) to raise its $250,000 limit guarantee on deposits.

Warren Buffett says Berkshire is cautious on banking sector

Warren Buffett on Saturday said Berkshire Hathaway (BRKa.N) is cautious around the banking sector, largely because of poor messaging by officials around government-insured deposits, as well as distorted incentives he said were brought on by banking regulation.

The messaging by politicians, government agencies and the media around the safety of the banking system has been poor, the nonagenarian billionaire said at Berkshire’s annual meeting in Omaha, Nebraska.

“The U.S. government and the American public have no interest in having a bank fail and having deposits actually lost by people,” he said.

“We had a demonstration project the weekend of Silicon Valley Bank and the public is still confused.”

In March, startup-focused lender SVB Financial Group (SIVB.O) became the largest bank to fail since the 2008 financial crisis after depositors tried to pull more than $42 billion in a single day, kicking off the deposit flight across other regional banks and prompting the collapse of Signature Bank.

While 89% of SVB’s $175 billion in deposits were uninsured as of the end of 2022, according to the FDIC, depositors were protected, even those whose accounts exceeded $250,000, through a “systemic risk exception” designed to prevent broader contagion to the U.S. banking system.

Berkshire keeps around $128 billion in cash and Treasury bills, Buffett said.

“We want to be there if the banking system temporarily even gets stalled in some way – it shouldn’t – I don’t think it will, but I think it could,” he said.

Part of the reason for that is that incentives in banking regulation are “so messed up,” he said.

First Republic Bank, the latest regional U.S. bank to fail, disclosed that it was offering non-guaranteed jumbo-sized mortgages at fixed rates in its annual report.

“That’s what First Republic was doing and it was in plain sight and the world ignored it until it blew up,” said Buffett, who earlier noted his own father lost his job in 1931 because of a bank run.

“The incentives in bank regulation are so messed up and so many people have an interest in having them messed up — it’s totally crazy,” Buffett said. “So we are very cautious in a situation like that about ownership.”

Buffett made the comments while sitting behind a sign that said “Available for sale,” while his longtime business partner, Charlie Munger, sat behind a “Held-to-maturity” sign, referencing how banks account for their securities, which has been at the heart of the regional bank crisis.

First Republic, which was seized by regulators and sold to JPMorgan N>, had significant losses in its held-to-maturity investment portfolio, mainly government-backed debt.

Source: https://www.moneycontrol.com/news/world/warren-buffett-says-berkshire-is-cautious-on-banking-sector-10540311.html