Adani Group-Hindenburg row: US-based short-seller Hindenburg has accused Gautam Adani’s conglomerate of ‘brazen financial fraud and stock manipulation’.
Sixteen opposition parties – including the Congress, Tamil Nadu’s ruling Dravida Munnetra Kazhagam, Left parties, Uddhav Thackeray’s Shiv Sena faction, and the Aam Aadmi Party – wrote to the Enforcement Directorate Wednesday to register a complaint related to the Gautam Adani-led Adani Group on ‘far-reaching charges of corporate fraud, political corruption, stock-price manipulation… misuse/monopolisation of public resources to benefit a single corporate group’.
In a two-page letter the 16 parties urged the agency – ‘which claims to pursue such cases with vigour and fairness… (but) has yet to launch even a preliminary inquiry’ – to investigate ‘a relationship that has serious implications not just for our economy but, most importantly, our democracy’.
In their letter to the ED – which cannot act unless there is a police complaint – the opposition cited accusations against the Adani Group that say it has established a network of offshore shell companies and offshore funds linked to the group ‘for the purposes of (1) artificially inflating stock valuations and (2) to give a distorted picture with regard to the group companies’ financial health’.
The opposition further claims a ‘clear causal link’ between the offshore entities and the Adani Group’s Indian companies – a reference to Gautam Adani’s brother Vinod, who they say is ‘alleged to be the person crucial to setting up these networks’.
The letter also talks of ‘cronyism’ and claims ‘Adani Group companies have repeatedly exercised improper influence to obtain concessions and contracts from governments and regulated entities’.
The opposition claims a tender for re-development of Mumbai’s Dharavi area, which it said was initially won by a Dubai-based company for ₹7,200 crore and then cancelled ‘because of delays in the transfer of Railways land’. The revised tender, the opposition said, was won by the Adani Group – ‘which has no known experience in urban redevelopment – for a sum over ₹2,000 crore lower.
The letter comes amid a fierce stand-off that has left Parliament deadlocked since it resumed sittings Monday for the Budget session, with squabbles between lawmakers from the ruling Bharatiya Janata Party and those from the opposition forcing adjournments at 2 pm on Monday and Tuesday.
Each time, shortly after resumption, both Houses were adjourned till 11 am the next day.
This afternoon too, both the Rajya Sabha and the Lok Sabha were adjourned till 2 pm, with additional ruckus over Congress MP Rahul Gandhi’s remarks at events in the United Kingdom.
Since the Adani-Hindenburg furore broke in January, the opposition has held firm on its demand for a JPC, or joint parliamentary committee, to probe allegations against the Adani Group by United States-based short-seller. The government has, so far, refused to accept this demand.
The Supreme Court has also become involved in this row, this month ordering the setting up of an expert committee of six members to be headed by former judge Justice AM Sapre. It also sought an update from the Securities and Exchange Board of India on its investigation within two months.
The top court’s panel is to look into the massive slide in Adani Group stock prices that followed the publication of the Hindenburg report; the market valuation of the group dropped by over $120 billion and opposition parties also red-flagged exposure of public financial bodies in India.
The Adani Group has denied all charges by Hindenburg Research and has paid back debts and held roadshows across the world to reassure investors and banks.
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