NEW DELHI: Claiming that the ‘PM-blessed’ Adani group is facing trouble raising funds abroad while being “heavily over-leveraged”, Congress on Wednesday wrote to the Reserve Bank of India asking for “implicit or explicit government assurances” given to the business conglomerate about a future bailout in case of financial troubles with foreign entities.
The AICC has also asked Sebi for a probe into the “overvalued” Adani scrips, and why was a high exposure of top public companies like LIC and SBI allowed into the group which has cost ordinary Indians crores of rupees in the recent market turbulence.
Congress general secretary Jairam Ramesh shot off letters to RBI chairman Shaktikanta Das and Sebi chairperson Madhabi Puri Buch, demanding probes into allegations of financial irregularities and stock manipulation, including round tripping and use of shell companies to over value the stocks, against the “influential business house”.
Addressing Das, Ramesh said RBI should ensure that “excessive debt exposure” by the Adani group does not destabilise India’s banking system, talking of a possible “contagion”. “The Adani group has been described as ‘deeply over-leveraged’ – if the Adani group has artificially inflated the value of its stock through manipulation by offshore shell companies and raised funds by pledging those overvalued shares, the recent sell-off in stock prices is creating vulnerabilities for the Adani group to find financing, and by implication for India’s banking system,” he noted, specifically seeking RBI focus on real Adani group exposure of the Indian banking system and the possible government guarantees to the Adanis that it will be given a bailout should foreign funding dry up.
“Will RBI ensure that Indian banks are not forced to step in to substitute for any shortfall in foreign financing, especially given the Adani group’s political connections,” Ramesh asked.
Talking about charges of manipulation against the business group in his letter to the Sebi chief, Ramesh said, “Apart from the potential violation of several Indian laws, this goes against everything that Sebi stands for. We urge you to investigate all potential violations and ensure complete transparency about who is investing in Adani group companies.”
He said inclusion of Adani Enterprises in the “National Stock Exchange Nifty 50 index” in September 2022 occurred despite the firm’s weak fundamentals, an excessive price-to-earnings ratio and a tiny free-float. He complained that the stock remains in key Indian indices despite global indices having suspended the group.
The AICC has also asked Sebi for a probe into the “overvalued” Adani scrips, and why was a high exposure of top public companies like LIC and SBI allowed into the group which has cost ordinary Indians crores of rupees in the recent market turbulence.
Congress general secretary Jairam Ramesh shot off letters to RBI chairman Shaktikanta Das and Sebi chairperson Madhabi Puri Buch, demanding probes into allegations of financial irregularities and stock manipulation, including round tripping and use of shell companies to over value the stocks, against the “influential business house”.
Addressing Das, Ramesh said RBI should ensure that “excessive debt exposure” by the Adani group does not destabilise India’s banking system, talking of a possible “contagion”. “The Adani group has been described as ‘deeply over-leveraged’ – if the Adani group has artificially inflated the value of its stock through manipulation by offshore shell companies and raised funds by pledging those overvalued shares, the recent sell-off in stock prices is creating vulnerabilities for the Adani group to find financing, and by implication for India’s banking system,” he noted, specifically seeking RBI focus on real Adani group exposure of the Indian banking system and the possible government guarantees to the Adanis that it will be given a bailout should foreign funding dry up.
“Will RBI ensure that Indian banks are not forced to step in to substitute for any shortfall in foreign financing, especially given the Adani group’s political connections,” Ramesh asked.
Talking about charges of manipulation against the business group in his letter to the Sebi chief, Ramesh said, “Apart from the potential violation of several Indian laws, this goes against everything that Sebi stands for. We urge you to investigate all potential violations and ensure complete transparency about who is investing in Adani group companies.”
He said inclusion of Adani Enterprises in the “National Stock Exchange Nifty 50 index” in September 2022 occurred despite the firm’s weak fundamentals, an excessive price-to-earnings ratio and a tiny free-float. He complained that the stock remains in key Indian indices despite global indices having suspended the group.
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