Congress demands SEBI and RBI probe into Hindenburg charges against Adani Group

Congress demanded an investigation by the SEBI and RBI into charges of alleged financial irregularities against the Adani Group, which has denied the charges.

Congress general secretary Communications Jairam Ramesh said the forensic analysis by the Hindenburg research into the Adani Group requires serious investigation by bodies like the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI), as they are responsible for ensuring stability and security of the country's financial system.

We fully understand the close relationship between the Adani Group and the current government. But it is incumbent on the Congress party as a responsible opposition party to urge SEBI and RBI to play their roles as stewards of the financial system and to investigate these allegations in the wider public interest, Ramesh said in a statement.

indenburg Research has alleged that Adani Group was engaged in a brazen stock manipulation and accounting fraud”, a charge the conglomerate described as malicious, unsubstantiated, one-sided, and having done with malafide intention to ruin its share-sale.

Hindenburg, a US-based investment research firm that specialises in activist short-selling, said its two-year investigation reveals that the Rs 17.8 trillion (USD 218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades. Adani Group said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix. 

Ramesh said the Modi Government can try and impose censorship, But in an era of globalisation of Indian businesses and financial markets can Hindenburg-type reports that focus on corporate misgovernance be simply brushed aside and dismissed as being malicious’? He said the evolution and modernisation of India’s financial markets since the 1991 reforms has aimed to improve transparency and to a level playing field for domestic and foreign investors.

Ramesh claimed these institutions have liberally financed the Adani Group even as their private sector counterparts have chosen to avoid investing because of concerns over corporate governance and indebtedness. As much as 8 percent of LIC’s equity assets under management, amounting to a gigantic sum of Rs 74,000 crore, are in Adani companies and comprise its second-largest holding, he said.

Will the RBI ensure that risks to financial stability are investigated and contained? Are these not clear-cut cases of phone banking he asked, alleging that the Adani group has built monopolies in ports and airports and become an overwhelmingly dominant player in power, roads, railways, energy and media.