Congress on Friday called for an investigation after a US-based research firm raised concerns in its report about the possibility that shares in Adani group companies could fall from current levels due to high valuations.
“But in an era of globalization of Indian companies and financial markets, can Hindenburg-type reports that focus on corporate grievances simply be brushed aside and dismissed as ‘malicious’? We fully understand the close relationship between the Adani Group and the current government. But it is up to the Congress Party, as a responsible opposition party, to urge the SEBI and RBI to play their role as stewards of the financial system and to investigate these allegations in the broader public interest,” Congress Chairman Jairam Ramesh said in a statement on Friday.
Jugeshinder Singh, Adani Group’s chief financial officer (CFO), on Wednesday said the conglomerate was “shocked” by Hindenburg Research’s report, calling it a “malicious combination of selective misinformation and outdated, unsubstantiated and discredited allegations that were tested.” were and rejected by the highest courts of India”.
The Congressional statement added that a political party should not normally respond to a hedge fund research report on an individual company or group of companies.
“But the forensic analysis by Hindenburg Research’s Adani group requires a response from the Congress party. For the Adani Group is no ordinary conglomerate: it has been closely linked to Prime Minister Narendra Modi since he was Prime Minister of Gujarat. ‘ the statement added.
“Furthermore, the high exposure of financial institutions such as Life Insurance Company of India (LIC) and State Bank of India (SBI) to the Adani Group has implications for financial stability and for the millions of Indians whose savings come from these pillars be managed of the financial system. It is worth noting that previous reports had described the Adani group as “heavily indebted”. The allegations require a serious investigation by those responsible for the stability and security of India’s financial system, namely the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI),” it said.
“The Hindenburg Report alleges “brazen stock manipulation” and “accounting fraud” by the Adani Group through “a vast labyrinth of offshore stamp companies,” Ramesh claimed.
“The development and modernization of Indian financial markets since the 1991 reforms have aimed to improve transparency and level the playing field for domestic and foreign investors. In particular, attempts have been made to increase the transparency of financial flows into the country – to prevent back and forth movements and money laundering by actors that could include criminals, terrorists and hostile countries, and to reduce reliance on offshore tax havens,” added her.
“The allegations of financial misconduct would be bad enough, but what’s even worse is that the Modi government is transforming the Indian financial system through the liberal investments in the Adani Group, funded by strategic government bodies such as LIC, SBI and other public sectors may have exposed banks to systemic risk,” Ramesh said.
“These institutions have generously funded the Adani Group despite their private sector counterparts choosing to avoid investment due to corporate governance and debt concerns. Up to 8 percent of LIC’s share assets under management, amounting to a staggering Rs.74,000 crore, are in Adani companies, constituting the second largest holding,” the statement added.
“None of this is going to be easy. In recent years, the Adani Group has established monopolies in ports and airports, becoming an overwhelmingly dominant player in power, roads, railways, energy and media The former operator of Mumbai’s Chhatrapati Shivaji Maharaj International Airport, India’s second busiest airport , was raided by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) after it turned down an offer from Adani Group. The operator agreed to sell the airport to Adani a month later and it’s a mystery what what happened after that with the ED and CBI cases,” it added.
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