(Aryavarth) : Prime Minister Narendra Modi may be presumed to have done well in Washington despite a tinge of doubt in his response to pointed questions about Indian democracy and minority rights, but the embarrassing questions were not the only source of sour taste in the otherwise impressive visit, for which president Joe Biden rolled out his best red carpet at the White House. The timing of the emergence of news about enquiries being made with American institutional investors in the Adani group, owned by Modi’s bosom friend Gautam Adani, whose mercurial rise ever since Modi ascended prime ministership is viewed with suspicion both inside and outside the country, also left a bad taste in the mouth.
According to media reports, the US Attorney’s Office in Brooklyn, New York, has sent inquiries in recent months to institutional investors with large holdings in the India conglomerate, the fortunes of which nosedived after a report by short selling specialist Hindenburg Research accused Adani group of long-running stock manipulation and accounting fraud. A similar probe is already under way by the US Securities and Exchanges Commission.
The Adani group’s rise, which has seen the conglomerate get into every economic activity in India, including in areas such as airport management in which the group has no previous experience, has been the most contested political issue in India, with Congress leader Rahul Gandhi leaving no stones unturned to expose, although he has had to pay dearly for it with his parliament membership.
Domestic investigations are also progressing into charges of irregularities levelled by Hindenburg, but the Modi establishment has used all its might to defend the group, at one stage even likening the US report’s attack against Adani group as an attack against India. The group has also received support from regulators, which are seen to have gone out of their way to help the embattled conglomerate, whose crash in market value has also hit millions of Indian investors. Some of these efforts have even by exposed by the Supreme Court.
In fact, Supreme Court had thwarted a move by market regulator SEBI to delay its investigation into the alleged manipulation of shares by the Adani group and issues that have been raised against the group in the wake of the Hindenburg report. In March, the apex court had directed the market regulator, which was already probing allegations against the Adani Group companies, to include the allegations levelled by Hindenburg in the scope of its probe and specifically investigate if there was a violation of the minimum public shareholding norms in public limited companies, failure to disclose transactions with related parties, and any manipulation of stock prices. SEBI’s original timeframe to complete the probe was May 2.
The market regulator had filed an application with the Supreme Court on April 29, seeking a six-month extension to complete its probe into the allegations levelled by US-based short-seller Hindenburg against the Adani Group. It was widely seen as a tactic to delay the probe which has come as a major embarrassment to the Modi government whose support to the group has always remained controversial.
The government and the ruling party had also launched an orchestrated attempt to denigrate Hindenburg and present shorting as something undesirable and even abominable. Adani himself has tried to pretend that the action by US investment firm in exposing the irregularities in his group’s accounting practices as an attack against India and the Modi government parroted the argument, in the process putting all its might behind the tycoon.
Adani group has disclaimed knowledge of the new enquiries that are under way in the US, but the market seems to have caught wind of the development. After a green streak in the price of the Adani group shares, the news saw the values go back to red this week. Flagship Adani Enterprises has fallen nearly 7 per cent in the wake of the report that the US authorities are looking into the representations Adani Group made to its American investors on alleged manipulation of its share prices. Similarly, Adani Transmission plunged 6.38 per cent, Adani Power declined 5.61 per cent and Ambuja Cements tanked 4.19 per cent on the BSE. Further, Adani Ports fell by 4.16 per cent, NDTV slumped 3.46 per cent, ACC 3.46 per cent, Adani Wilmar 3.42 per cent, Adani Total Gas 3.21 per cent and Adani Green Energy dipped 1.5 per cent. (IPA Service)
By K Raveendran. The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Aryavarth Express