The Congress on Friday demanded a “serious investigation” by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) into a report by the U.S. based short-seller Hindenburg Research that accused the Adani Group of “brazen stock manipulation and accounting fraud”.
Jairam Ramesh, Congress general secretary in-charge of communication, said in a statement that exposure of financial institutions such as Life Insurance Corporation of India (LIC) and State Bank of India (SBI) to the Adani Group would have implications for the country’s financial stability and crores of depositors “whose savings are stewarded by these pillars of the financial system”.
“Normally a political party should not be reacting to a research report on an individual company or business group prepared by a hedge fund. But the forensic analysis by Hindenburg Research of the Adani Group demands a response from the Congress party,” he said, adding, “This is because the Adani Group is no ordinary conglomerate: it is closely identified with Prime Minister Narendra Modi since the time he was Chief Minister.”
The Adani Group has said that the charges against it were “malicious, unsubstantiated, one-sided, and was timed to ruin the public listing of its shares”.
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“The allegations require serious investigation by those who are responsible for the stability and security of the Indian financial system, viz. the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI),” Mr. Ramesh said.
“The allegations of financial malfeasance would be bad enough, but what is worse is that the Modi government may have exposed India’s financial system to systemic risks through the liberal investments in the Adani Group made by strategic state entities like LIC, SBI and other public sector banks,” he added.
The Congress leader said that as much as 8% of LIC’s equity assets under management, amounting to a sum of ₹74,000 crore, were invested in the Adani Group of companies, while public sector banks had lent to the Adani Group twice as much as the private banks, with 40% lending being done by the SBI.
“Indians are increasingly aware of how the rise of Modi’s cronies has exacerbated the problem of inequality, but need to understand how this has been financed by their own hard-earned savings,” said Mr. Ramesh.
Asking if there is a quid pro quo between the Modi government and the Adani Group, the Congress leader alleged, “In perhaps, the most egregious case of crony capitalism, the previous operator of Mumbai’s Chhatrapati Shivaji Maharaj International Airport, India’s second busiest airport, was raided by the Enforcement Directorate (ED) and the Central Board of Investigation (CBI) after it rejected an offer by the Adani Group”.
“The operator agreed to sell the airport to Adani a month later and it is a mystery what happened to the ED and CBI cases thereafter,” Mr. Ramesh added.
Lok Sabha member Manish Tewari said on Twitter that if the Hindenburg report was even partially correct, “it merits both a Joint Parliamentary Committee — much like the 1992 JPC & a Supreme Court Monitored investigation to get to the bottom of the matter. The Budget Session of Parliament begins 31st Jan 2023”.
Congress Rajya Sabha member Randeep Surjewala tweeted, “Exposure of #LIC in Adani Group is ₹77,000 cr. LIC has today lost ₹23,500 cr. in invest value in Adani Group i.e at ₹53,000 cr. against ₹77,000 CR. LIC is money of People of India. In any other country, heads would have rolled including that of FM.”
Communist Party of India general secretary D. Raja said the policies pursued by the Narendra Modi government had resulted in corporate houses such as the Adani Group getting control over seaports, airports and other public sector undertakings. “Now, this report has exposed everything. Prime Minister Modi must explain to the nation and there must be a thorough investigation,” Mr. Raja told The Hindu.