Is George Soros making the biggest short-selling bid of his life on India?

US billionaire investor and philanthropist George Soros seems convinced that democracy is in trouble in India. (Image: AFP)

On Thursday (February 16, 2023), the Hungarian-American billionaire hedge fund manager George Soros, speaking at the Munich Security Conference, said that following the mayhem with Adani group shares, Narendra Modi “will have to answer questions from foreign investors and in parliament”. “This will significantly weaken Modi’s stranglehold on India’s federal government,” he read out from his typed-out speech, “and open the door to push for much-needed institutional reforms. I may be naive, but I expect a democratic revival in India.”

Watch: External affairs minister S. Jaishankar's response to George Soros

Soros has been on India’s case for some time now. At the World Economic Forum annual meet at Davos in 2020, he pronounced that “the biggest and most frightening setback (to democracy in the world) occurred in India where a democratically elected Narendra Modi is creating a Hindu nationalist state, imposing punitive measures on Kashmir, a semi-autonomous Muslim region, and threatening to deprive millions of Muslims of their citizenship”.

Soros has long seen himself as a champion of democracy across the world, though for him, “democracy” may actually mean a political party or a government that he approves of. He has financed various political movements in eastern Europe and former Soviet republics. He is the biggest funder of the Democratic Party in American history and backed the presidential bids of Barack Obama, Hillary Clinton and Joe Biden with millions of dollars.

He puts his money where his mouth is. According to Forbes magazine, as of March 2021, he had a net worth of $8.6 billion, after having donated more than $32 billion to his Open Society Foundations that carry out his extra-curricular work.

So it can be safely assumed that he has been funding anti-Modi media and activists in India and will be increasing his exposure.

I use the word “exposure” here very consciously. Because at the end of it all, Soros works to make money. In 1998, he was asked by the interviewer on the American TV show 60 Minutes about the misery he had caused in several east Asian countries by betting against their currencies and triggering an economic collapse. He replied: “I am basically there to make money. I cannot and do not look at the social consequences of what I do...I don't feel guilty. Because I'm engaged in an amoral activity which is not meant to have anything to do with guilt.”

It will be no surprise if it comes to light someday that it was Soros who led the spree of short-selling Adani group shares through his opaque worldwide web of investment companies. Of course, there may be nothing illegal about this. The short-sellers took a punt. Many of them may have made serious money and many could also have suffered losses.

But Soros has not always operated on the right side of the law. In 2002, he was fined $2.8 million by a French court for insider trading. In 2009, in his native Hungary, he had to pay up $2.5 million for illegal manipulation of share prices. In 2018, he was convicted in Hong Kong for “naked” short selling.

Yet, he is a man remarkably free of any sense of guilt. As a 14-year-old Hungarian Jew, he pretended to be Christian and accompanied a Nazi official around Budapest as he confiscated property owned by Jews, threw them out and perhaps put them on the trains to concentration camps to be slaughtered.

In the 1998 60 Minutes interview, he stated that he felt “no sense of guilt” for what he did.

In a written statement submitted to the US Congress in 2006, Congressman Mark Souder noted: “When the Nazis occupied Budapest in 1944, George Soros’ father was a successful lawyer… Knowing that there were problems ahead for the Jews, he…bought (his family) forged papers and he bribed a government official to take 14-year-old George Soros in and swear that he was his Christian godson. But survival carried a heavy price tag. While hundreds of thousands of Hungarian Jews were being shipped off to the death camps, George Soros accompanied his phony godfather on his appointed rounds, confiscating property from the Jews.” Souder then provided excerpts from the transcript of the 60 Minutes interview.

“I was 14 years old,” Soros told his interviewer Steve Kroft. “And I would say that that's when my character was made. (I learnt) that one should think ahead. One should understand and anticipate events and when one is threatened. It was a tremendous threat of evil. I mean, it was a very personal experience of evil.”

Kroft asked him: “That sounds like an experience that would send lots of people to the psychiatric couch for many, many years. Was it difficult?”

Soros: “Not at all. Not at all…it created no problem at all.”

Kroft: “No feeling of guilt?”

Soros: “No.”

Kroft: “For example, that I'm Jewish and here I am, watching these people go. I could just as easily be there. I should be there. None of that?”

Soros: “Well, of course I could be on the other side or I could be the one from whom the thing is being taken away. But there was no sense that I shouldn't be there, because that was—well, actually, in a funny way, it's just like in markets—that if I weren't there… somebody else would…be taking it away anyhow… I was only a spectator…so I had no role in taking away that property. So I had no sense of guilt.”

Soros has also said that 1944, when he was spectator to these terrible events, was “the best year of my life”.

This is a fully self-aware and ice-cold man ruthlessly focused in a Darwinian manner only on self-interest. As a friend put it, when I shared clips of the interview with him, what Soros was saying was bizarre, if not downright macabre.

To be fair, Soros has never hidden his agendas. He has said many times that he wants to use his wealth to reshape the world in the way he thinks fit. It is also undeniable that he played a key role in moving many former Soviet bloc countries from Communist dictatorship to democracy—though in many cases, that dream of democracy has sputtered and lives on only in the fact that these countries hold periodic elections.

Soros is convinced that democracy is in peril in India. And once he gets a bee in his bonnet, he puts all his might behind that cause. For instance, while campaigning against the United States government’s “war on drugs” policy, he went to the extent of helping produce It's Just a Plant, a children's book that promoted the use of marijuana. But he may also be looking to make a killing on India.

He could be planning a big short on India. The rupee is not fully convertible, so an attack on it may not yield the sort of spectacular profits that he made in 1998, short-selling the Thai baht and the Malaysian ringgit. But he may be eyeing the stock market. He will certainly be talking to foreign investors—both direct and portfolio—and funding both western and Indian media and think tanks and NGOs to push the anti-Modi line.

We are a year away from the next Lok Sabha elections. Expect some interesting times and also many conspiracy theories. But in India, which is growing faster than any other major economy in the world and where Modi is enjoying high approval ratings, Soros may have bitten off a tad more than he can chew.