Congress demands RBI, SEBI investigation into Hindenburg report on Adani Group
3 min read . Updated: 27 Jan 2023, 05:35 PM IST
Premium- Researchers from Hindenburg had pointed out the complicated maze of transactions undertaken by many of the listed Adani Group firms.
Congress on 27 January has demanded SEBI investigation into Hindenberg report on Adani.
Hindenburg Research on its website said that the company specialises in forensic financial research. It says it has 'experience in the investment management industry spans decades, with a historical focus on equity, credit, and derivatives analysis.
"While we use fundamental analysis to aid our investment decision-making, we believe the most impactful research results from uncovering hard-to-find information from atypical sources," the company website says.
Researchers from Hindenburg had pointed out the complicated maze of transactions undertaken by many of the listed Adani Group firms.
Congress leader Jairam Ramesh while issuing a statement wrote, Jairam Ramesh, it wrote, “Normally political party should not be reacting to a research report on an individual company or business group prepaid by a hedge funit. But the formic analys by Hindenburg Research of the Adani Group demands a response from the Congress party This because the Alan Group ordinary conglomerate it is closely identified with Prime Minister Narendra Modi since the time he was Chief Minister."
“Furthermore the high exposure of financial institutions such as the Life Insurance Company (of India (LIC) and the State Bank of India (SBI) to the Adan Croup has implications for financial stability and for the cures of Indians whose savings are stewarded by these pillars of the financial system. It is worth noting that earlier reports had described the Adani Group "deeply over leveraged". The allegations require serienes investigation by those who are responsible for the stability and security of the Indian financial system, vie, the Reserve Bank India (RB) and the Securities and Exchange Board of India (SBI)."
It further wrote, “The Hindenburg report alleges "bean stock manipulation" and "accounting fraud by the Adani Group via a vast labyrinth of offshore shell entities The evolution and modemisation of India's financial markets since the 1991 reforms has aimed to improve transparency and to level the playing field for domestic and foreign investors. It has specifically sought to increase the transparency of financial flows into the country-to prevent round-tripping and money-laundering by actors that could include criminals, emrists and hostile countries- and to reduce dependenor on offshore tax havern. For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by in favourite business group? Is there a quid pro quo? Will SEMI investigate these allegations to the fullest and not just in name?"
"The allegations of financial malfeasance would be bad enough, but what is worse is that the Modi government may have exposed India’s 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."
"The allegations require serious investigation by those who are responsible for the stability and security of the Indian financial system, viz. the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI)," says the Congress.
"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 indebtedness. As much as 8% of LIC’s equity assets under management, amounting to a gigantic sum of ₹74,000 crore, are in Adani companies and comprise its second-largest holding," Ramesh adds
Adani Group termed a Hindenburg Research report on the group “malicious combination of selective misinformation and stale" after the US short seller revealed it held short positions in the group and made wide-ranging accusations.
However, Adani Group has termed the research report “malicious combination of selective misinformation and stale" after the US short seller revealed it held short positions in the group and made wide-ranging accusations."
“We are shocked that Hindenburg Research has published a report on 24 January 2023 without making any attempt to contact us or verify 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 India’s highest courts," Adani Group CFO Jugeshinder Singh said in a statement on Wednesday.
As per latest report, the Group is considering legal action against Hindenburg Research, whose report calling out the conglomerate’s debt position and governance issues led to shares of the group’s companies losing ₹85,000 crore in value.
