Jairam Ramesh writes to RBI, SEBI seeking investigations on Adani Group

New Delhi [India], February 15 (ANI): Congress leader Jairam Ramesh has written to Reserve Bank of India Governor Shaktikanta Das and SEBI chairperson Madhabi Puri Buch, in two separate letters, seeking an investigation on the allegations levelled against the Adani Group by Hindenburg Research.

Citing the Adani Group’s large size, his letter to the SEBI chief said investigations must be “fair and complete, with no favour”. “Any failure to do so will cast a shadow on Indian corporate governance and on India’s financial regulators, and could affect our ability to raise funds globally,” the letter read. He reiterated that a full-fledged independent investigation must be carried out on the numerous allegations levelled against the Adani Group.

Further, in his letter, he raised questions in what he said is why financial institutions of national importance such as the Life Insurance Corporation of India and the State Bank of India have heavily bought Adani Group equity when most private funds were severely underweight. “LIC, which 30 crore Indians trust with their life savings, has lost thousands of crores in Adani Group stock in recent days. Should we not ensure that such public sector financial institutions are more conservative in their investments than their private sector counterparts and free from pressure from above?” he questioned.

In the letter to the RBI governor, he said the central bank must look into two aspects — what is the true Adani Group exposure of the Indian banking system and the possible bail-out plan if foreign funding to the group declines. “The RBI must look into two aspects: One, what is the true Adani Group exposure of the Indian banking system? Two, what are the explicit and implicit guarantees that the Adani Group has been given that it will be bailed out by Indian banks if foreign funding dries up?” he said in the letter.

Over the past two odd weeks, share prices of companies in the Adani Group have dropped significantly. The short seller’s report alleged stock manipulation and fraud by the conglomerate. The US-based firm, in its report on January 24, raised concerns about shares of Adani group companies having a possibility of declining from their current levels owing to high valuations, “brazen stock manipulation”, and “accounting fraud”, among others.

The Adani Group has attacked Hindenburg as “an unethical short seller” and stated that the report by the New York-based entity was “nothing but a lie”. The continued sell-offs in the group’s stocks led its flagship firm, Adani Enterprises Limited, to cancel a fully subscribed Rs 20,000 crore follow-on public offer. A follow-on public offering (FPO) is the issuance of shares to investors by a company listed on a stock exchange after its initial public offerings.

Adani Group on January 29, in a long 413-page report, said the recent report by Hindenburg Research was not an attack on any specific company but a “calculated attack” on India, its growth story, and ambitions.