Repercussions from an explosive report on Adani from US short-seller Hindenburg Research have spilled over into Indian domestic politics.
| India’s Adani Group is staring down accusations of massive fraud and money laundering by pushing ahead with a $US2.5 billion share offer, even as it is bracedfrom US short-seller Hindenburg Research have spilt over into Indian domestic politics. Adani has been accused of being too closely linked to government-backed investors, but the claims are unlikely to damage Prime Minister Narendra Modi’s government, observers say.
LIC’s continued backing of Adani cost it dearly last week, with a multi-billion dollar plunge in both its existing Adani stake and its own market value, which was slated back to its exposure to Adani. The State Bank of India behemoth is also an Adani backer.India’s veteran but weakened opposition, the Congress party, has attempted to gain some points by calling on the Reserve Bank of India and the Securities Exchange Board of India to investigate the Hindenburg allegations.
He cited Adani’s close links to Mr Modi, and the possible exposure of India’s financial system to systemic risks through investments made by LIC, SBI and others, and raised allegations of crony capitalism in relation to the sale of India’s second-busiest airport to Adani.Congress is unlikely to get much traction, observers say.
He noted that in the West Bengal state, a $4.3 billion mega port development was backed by parties at opposite ends of the political spectrum. An Adani company won the development contract in September.“We consider a proximity between the government and a couple of industrial groups to be very natural. This report has come from a firm outside of India and so far, there has been no legal action taken,” Dr Das said.
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