Why do LIC, SBI continue to invest in Adani group, Opposition asks

Noting that LIC and SBI have seen huge declines in market cap and investment value, Opposition leaders ask why public money is being wasted, and question the Central government’s silence

January 28, 2023 11:06 pm | Updated January 29, 2023 04:33 pm IST - NEW DELHI

People walk past an electronic display featuring news about Adani Group outside the Bombay Stock Exchange building in Mumbai, on Jan. 27, 2023.

People walk past an electronic display featuring news about Adani Group outside the Bombay Stock Exchange building in Mumbai, on Jan. 27, 2023. | Photo Credit: AP

Opposition leaders across party lines on Saturday raised concerns about the Life Insurance Corporation (LIC) of India and the State Bank of India’s (SBI) exposure to the Adani group, questioning the Union government’s silence on the issue.

On January 25, New York-based investor research firm, Hindenburg Research, had accused the Adani group of “brazen stock manipulation and accounting fraud”. Rejecting the charge, the ports-to-power conglomerate said that the allegations were “malicious, unsubstantiated, one-sided”. The report was timed to spoil the public listing of its shares in the capital markets, the Adani group claimed.

In a series of tweets, senior Congress leader and Rajya Sabha member Randeep Surjewala used publicly available data to show the dip in market capitalisation of government-controlled financial institutions due to the falling value of Adani shares. Noting that LIC was funded by “public money”, Mr. Surjewala said that the value of LIC’s investment in Adani Group shares had fallen from ₹77,000 crore to ₹53,000 crore, resulting in a loss of ₹23,500 crore, while LIC’s shares had lost ₹22,442 crore. He asked why LIC was still investing ₹300 crore in the Adani Group.

With regard to SBI, Mr. Surjewala noted that its market capitalisation had declined by a whopping ₹54,618 crore, adding that the banking sector’s loan exposure to the Adani group was ₹81,200 crore. Given this situation, he questioned why the SBI Employees Pension Fund and SBI Life were still investing ₹225 crore in the Adani Group.

‘Silence from the Centre’

The Congress leader also asked why Central agencies such as the Reserve Bank of India (RBI), the Securities Exchange Board of India (SEBI), the Enforcement Directorate, the Serious Frauds Investigation Office, and the Central Bureau of Investigation, as well as Finance Minister Nirmala Sitharaman, have all remained “mute”.

Priyanka Chaturvedi, deputy leader of the Uddhav Thackeray-led Shiv Sena faction in the Rajya Sabha, echoed his concerns. ”LIC saw 22% dip in its holdings in last two days, its share price fell 3.5% during the day and 5.3% over two days. This is Indian people’s hard earned savings which is being pumped in and sucked out. Hope SEBI and RBI are watching & acting,” she tweeted.

‘Banks will sink’

Trinamool Congress’ Rajya Sabha member Jawhar Sircar also tweeted, ”I know from 40 years in Government that LIC’s big investments need a nod from FM or PM. Don’t know why they’re out to destroy an excellent institution that caters to the middle class!”

“Swiss Credit Sights had warned long ago. Modi Government did not listen. Our banks will now sink — your money, my money will go down — while Adani goes away scot-free!” Mr. Sircar added.

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