A concerted campaign by Congress friendly media to destabilize the Indian stock markets

In 2013, a reporter was arrested by the police for accepting bribes from construction company Zoomlion’s competitor. The CCTV’s reporter wrote more than 10 stories between September 2012 and August 2013 with fabricated facts stating there had been losses of state assets, abnormal sales practices and false financial reporting by Zoomlion. The stories led to the fall of stock prices of Zoomlion by as much as 26.9% on the Hong Kong stock exchange between the September-August period.

“If you can lower the price of a stock by one percent by purposefully manipulating the news flow by producing content and if you have the right trading mechanism in place, you can capitalize on that,” said Anton Gordon, co-founder of indexer.me. In an article published in Forbes, Gordon was talking about how a targeted misinformation campaign can wreak havoc on companies’ stocks.

 “Imagine if you can recognize that the story is not the least bit credible and you know the stock will recover, you can really capitalize on that knowledge,” Anton further elaborated on the issue.

However, Anton is only talking about one motive, financial, for a targeted disinformation campaign designed to hurt a company’s stocks. There could be other motives involved. As is the case with economic sabotage, one of the motives could be driven by political considerations. For a politically motivated targeted disinformation campaign, the stakes are high and so is the span but the dividends can be reaped for a long time to come.

It seems one such targeted disinformation campaign is underway by a section of Indian media with the immediate goal of destabilizing the stock markets and the larger, related, goal of unseating the existing dispensation. The pattern of targeted attack with these goals in mind is more than visible in this week’s two prominent media stories, or more accurately, shoddy hit-jobs.

Two media portals, namely The Wire and Cobrapost published articles targeting Zee Entertainment Enterprises Ltd (ZEEL) and Dewan Housing and Finance Limited (DHFL), respectively. As expected, the reaction of the market was adverse. ZEE group is the largest media company in the country while the DHFL holds a prominent position in the financial and construction sector. The most striking aspect of these hit-jobs was the timing. The articles were published in view of the upcoming budget presentation by Finance minister Piyush Goyal. The interim budget of the Modi government is scheduled to be presented on February 1.  The share of ZEEL plunged over 26 percent wiping out value worth 14,000 crore rupees on Friday, January 25 after the article was published on the portal on January 24. The DHFL lost more than 8 percent of value after the supposed exposé by Cobrapost.

The exposé by Cobrapost was carried out with the same intentions. The investigative website created ‘mahaul’ before coming with the exposé. The media website wrote on its Twitter handle that “We invite you to cover our press conference “The Anatomy of India’s Biggest Financial Scam” at 3:00 PM on Tuesday, January 29, at Press Club of India, 1 Raisina Road,110001. The scam is around 33,000 crores rupees. Our Editor shall address the media following a Panel Discussion,” one 26^th January afternoon.” 

The supposed exposé was scheduled on January 29 and the markets were held for ransom for three days and the shares of many companies including Adani group plunged due to the speculation that exposé could be about the group. Cobrapost must have planned the exposé for weeks or even months but it sent a questionnaire to DHFL only a few hours before the press conference. This must be due to the fact the website deliberately tried to mislead about which company the exposé is. The ‘ambiguity’  was planned because it could lead to speculation about any company and therefore investors will pull out money from all doubted companies. The intended result would be chaos in the markets just before the crucial, last budget of the government’s term before the 2019 elections.

Shares of Adani group companies fell because the investors thought that the anticipated ‘33,000 crore rupees exposé’ was about Adani group.

The planning was more or less successful as despite the fact that exposé was about DHFL, the shares of Adani group which are ‘considered’ close to Modi government, fell. “Your request for explanations a few hours prior to the press conference only shows that you do not heed to any ethical journalistic practices,” wrote DHFL in its reply to Cobrapost. “Isn’t the timing of the press conference curious? Just half an hour before the Stock Market closes. What is the real intent here? Exposé? Or something else?” it added suggesting the same. Interestingly enough, Friday evening was chosen as the timing of the exposé to create maximum harm for the company and the stock market before it closes for two days.

The website also scored political points by claiming that companies linked to the owners of DHFL donated 18 crore rupees to BJP. Most of big corporates donate to political parties including BJP and Congress, this is legal and well-known practice but Cobrapost prominently highlighted this to defame BJP. 

The ‘exposé’ by these two media house has severely affected the stock markets. The Bombay Stock Exchange and National Stock Exchange have fallen consistently in the last week since the hit-job on Zee group was published by the Wire. After that Cobrapost held the markets on ransom since 26^th January. The Modi government will present full budget on February 1 for the stability and benefit of the economy. These media portals which have very clear cut political agenda to destabilize the markets before the budget session.

As is evident, the Indian stock market has performed exceptionally well under the Modi government in the last 5 years. India is the fastest growing major economy in the world and macroeconomic stability is at an all-time high. The concerted and targeted disinformation campaigns that these shoddy hit-jobs are, appear to be solely designed to target the Modi government.