New Delhi, January 27
Liberal investments in the Adani Group made allegedly by state entities like LIC, SBI and other public sector banks may have exposed the county’s financial system to heavy risks, the Congress on Friday said, adding that it “fully understands the close relationship between the Adani Group and the current government”.
According to the Congress, institutions such as LIC, SBI and other public sector banks liberally financed the Adani Group. Private sector banks, on the other hand, chose to avoid investing because of concerns over corporate governance and indebtedness, Congress general secretary Jairam Ramesh said in a statement.
Ramesh said as much as 8 per cent of LIC’s equity assets under management, amounting to a gigantic Rs 74,000 crore, were in Adani companies and comprised its second-largest holding.
State-owned banks lent twice as much to the Adani group as private banks, with 40 per cent of the lending done by the SBI, Ramesh said, adding that this “irresponsibility” had exposed crores of Indians who poured their savings into the LIC and SBI to financial risks.
Citing the Hindenburg report, the Congress said the report alleged “brazen stock manipulation” and “accounting fraud” by the Adani Group via “a vast labyrinth of offshore shell entities”.
“If, as alleged, the Adani Group has artificially inflated the value of its stock through manipulation, and raised funds by pledging those shares,” Ramesh said, adding that banks such as the SBI could face heavy losses (in the event of a fall in the share prices).
In an era of globalisation of Indian businesses and financial markets, the Hindenburg-type reports that focus on corporate misgovernance cannot be simply brushed aside and dismissed as being “malicious”, the statement by the Congress leader said.
According to Ramesh, the financial reforms initiated in the country in 1991 were aimed at reduction of dependence on offshore tax havens.
“For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group? Is there a quid pro quo? Will SEBI investigate these allegations to the fullest and not just in name?” Ramesh asked.
Ramesh, who is also a member of the Rajya Sabha, said the Congress, as a responsible opposition party, would like to urge SEBI and RBI to “play their roles as stewards of the financial system” and investigate the allegations against the Adani Group in the wider public interest.
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