Congress seeks SEBI, RBI probe into Hindenburg charges against Adani Group

The Congress on Friday demanded an investigation by the SEBI and RBI into charges of alleged financial irregularities against the Adani Group which has denied the chargesCongress 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 countrys financial systemWe 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 statementHindenburg Research has alleged that Adani Group was engaged in a brazen stock manipulation and accounting fraud a charge the conglomerate described as malicious unsubstantiated onesided and having done with malafide intention to ruin its sharesaleHindenburg a USbased investment research firm that specialises in activist shortselling said its twoyear investigation reveals that the Rs 178 trillion USD 218 billion Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decadesAlso Read Adani Group stocks continue to fall Adani Total Gas tanks nearly 20 pcAdani Group said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix The report is a malicious combination of selective misinformation and stale baseless and discredited allegations that have been tested and rejected by Indias highest courts the portstoenergy conglomerate said in a statementRamesh said the Modi Government can try and impose censorship But in an era of globalisation of Indian businesses and financial markets can Hindenburgtype reports that focus on corporate misgovernance be simply brushed aside and dismissed as being maliciousHe said the evolution and modernisation of Indias financial markets since the 1991 reforms has aimed to improve transparency and to a level playing field for domestic and foreign investorsIt has specifically sought to increase the transparency of financial flows into the country to prevent roundtripping and moneylaundering by actors that could include criminals terrorists and hostile countries and to reduce dependence on offshore tax havens the Congress leader saidFor all its posturing about black money has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group Is there a quid pro quo Will SEBI investigate these allegations to the fullest and not just in name he askedThe allegations of financial malfeasance would be bad enough but what is worse is that the Modi government may have exposed Indias financial system to systemic risks through the liberal investments in the Adani Group made by strategic state entities like LIC SBI and other public sector banks he alleged in the statementRamesh 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 indebtednessAs much as 8 percent of LICs equity assets under management amounting to a gigantic sum of Rs 74000 crore are in Adani companies and comprise its secondlargest holding he saidStateowned banks have lent twice as much to the Adani group as private banks with 40 per cent of their lending being done by the SBI he also allegedThis irresponsibility has exposed the crores of Indians who have poured their savings into LIC and SBI to financial risk If as alleged the Adani Group has artificially inflated the value of its stock through manipulation and then raised funds by pledging those shares banks such as SBI could face heavy losses in the event of a fall in those share prices he saidWill the RBI ensure that risks to financial stability are investigated and contained Are these not clearcut 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 mediaThe Congress general secretary said normally a political party should not be reacting to a research report on an individual company or business group prepared by a hedge fund but the forensic analysis by Hindenburg Research on the Adani group demands a response from the Congress partyThis is because the Adani Group is no ordinary conglomerate it is closely identified with Prime Minister Narendra Modi since the time he was chief minister Ramesh saidThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday 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