Allegations of fraud against the Adani group have sparked a political crisis in India
Friday was the second day in a row that opposition leaders disrupted parliament in order to press for an investigation into the allegations.
Shares of Adani Group Companies dropped significantly after a research firm accused the companies of stock manipulation and financial fraud last week. The organisation has refuted the charges. Opposition leaders in India called for an investigation on Friday, prompting lawmakers to postpone morning sessions in both houses of parliament.
They have demanded the establishment of a panel overseen by the Supreme Court or a Joint Parliamentary Committee to look into the claims made against Adani and the potential loss of money for Indian investors as a result of the company’s share price decline.
The market value of companies in the Adani group has dropped by $108bn over the past few days after a report by a US investment firm, Hindenburg Research, accused the group of “brazen” stock manipulation and accounting fraud spanning decades. The organisation has denied the claims, branding them a “attack on India” for their perceived bias and falsehood. Adani shares continued to drop despite the response.
The company’s founder, Gautam Adani, is no longer among the top 10 wealthiest people in the world. Mr. Adani is now the 15th richest person on the planet, with a net worth of $74.7 billion, according to Forbes’ real-time list of billionaires. One week ago, he ranked third on that list.
Adani Group, which the billionaire oversees, is among India’s largest businesses. Adani Enterprises is the parent company and is involved in a wide variety of businesses such as commodities trading, airports, utilities, and renewable energy. After the government denied the opposition’s requests to halt business and discuss the Adani issue, the lawmakers in question disrupted parliament again on Thursday.
Mallikarjun Kharge, leader of the main opposition Congress party, said, “There should also be day-to-day reporting of the investigation on the issue.”
The opposition party, the Congress, has claimed that the government is putting citizens’ life savings at risk by pressuring public-sector banks like the State Bank of India (SBI) and government-owned insurance firms like the Life Insurance Corporation of India (LIC) to invest in the company.
However, on Friday, India’s finance minister Nirmala Sitharaman told a news channel that SBI and LIC’s exposure to the Adani group was “well within the permissible limits,” citing earlier statements made by the two companies. She added that investors need not worry because India’s financial market is “well-regulated.”
The Congress has also announced that on Monday, protests will be held in cities across the country outside the headquarters of companies owned by the Adani Group, as well as nationalised banks and public institutions. KC Venugopal, the party leader, has said that the BJP-led government is “using common people’s money to support their closest friends.” Mr. Adani is widely believed to be in close contact with Prime Minister Narendra Modi. Opposition politicians have long accused him of profiting from his political connections, a claim he has consistently denied.