Jairam Ramesh urges RBI, SEBI to probe allegations against Adani Group

Senior Congress leader Jairam Ramesh has written to the Reserve Bank of India RBI Governor Shaktikanta Das and Securities and Exchange Board of India SEBI Chairperson Madhabi Puri Buch and sought an investigation into allegations of financial irregularities and stock manipulation against the Adani GroupIn his letter to Das posted on Twitter on Wednesday Ramesh urged the RBI to ensure that excessive debt exposure by the Adani Group currently and in the future does not destabilise Indias banking systemThe Adani Group has been described as deeply overleveraged 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 Indias banking system the Congress MP said in his letter dated February 14Ramesh called on the RBI to look into two aspects what is the true Adani Group exposure of the Indian banking system and 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 upAlso Read Regulators very experienced says FM on Adani Group rowWill the RBI ensure that Indian banks are not forced to step in to substitute for any shortfall in foreign financing especially given the Adani Groups political connections Ramesh askedPublic sector financial institutions like the Life Insurance Corporation of India and the State Bank of India have been unusually generous to the Adani Group in recent years the Congress leader allegedThe RBI must ensure that risks to financial stability are investigated and contained he said in his letterThe risks of contagion from any collapse in the Adani Groups ability to secure financing must be monitored constantly Ramesh arguedAs the steward of the financial system the RBI must do everything possible to protect Indias banks and financial institutions and we urge you to act in the national interest to ensure that Indias taxpayers do not pay the price for the misgovernance and potential illegalities of one influential business house he wrote to DasRamesh also posted his letter to SEBI chief Buch on Twitter saying many Indian citizens were disturbed by the allegations that the Adani Group has indulged in brazen stock manipulation and accounting fraud via a vast labyrinth of offshore shell entitiesApart from the potential violation of several Indian laws this goes against everything that the Securities and Exchange Board of India SBI stands for We urge you to investigate all potential violations and to ensure complete transparency about who is investing in Adani Group companies Ramesh saidGiven the Adani Groups size and political connections it is incumbent that such investigations are seen as fair and complete with no favour shown to the influential business group the Congress general secretary stressedAny failure to do so will cast a shadow on Indian corporate governance and on Indias financial regulators and could affect our ability to raise funds globally he arguedIn his letter Ramesh asked why financial institutions of national importance such as the Life Insurance Corporation of India IIC and the State Bank of India SBI have heavily bought Adani Group equity when most private funds have been severely underweight because of concerns over corporate governance and indebtednessLIC 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 Ramesh saidThe inclusion of Adani Enterprises in the widely used National Stock Exchange Nifty 50 index in September 2022 occurred despite the firms weak fundamentals an excessive pricetoearnings ratio and a tiny free float he allegedHe further claimed that adding Adani Enterprises compelled supposedly conservative Nifty index funds to make significant purchases of this risky stock including the Employees Provident Fund Organisation Indias largest pension fundIn recent days global stock indices have suspended Adani Group companies while the matter is investigated but the NSE has failed to take any similar action to protect investors Ramesh saidIs it not SEBIs responsibility to ensure that index investors are protected from investing in questionable firms he askedWe urge SEBI to play its role as the steward of Indias financial markets on behalf of the crores of Indians who have faith in the fairness of Indias financial markets the Congress leader saidRamesh shared the letters on Twitter and said that he has expressed the hope that a fullfledged independent investigation will be carried on the numerous allegations against the PMblessed Adani GroupThe Congress has been demanding a Joint Parliamentary Committee probe into the allegations against the Adani Group by USbased shortseller HindenburgThe Adani Group has dismissed the allegations as baselessThis 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 managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever