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Congress general secretary Jairam Ramesh posed a set of three questions to Prime Minister Narendra Modi as part of the party’s ”HAHK (Hum Adani ke Hain Kaun)” series to target the government in the wake of the fraud-allegation-triggered rout in Adani Group company stocks.
Ramesh alleged that the ”failure” of market regulators like the Securities and Exchange Board of India (SEBI) to protect Indian capital markets has ”tarnished” their image and put a question mark on the integrity of India’s financial markets.
In a statement addressing the prime minister, Ramesh said, ”You (PM) have used strong words in the past, calling on world leaders at G20 meets ‘to eliminate safe havens for economic offenders’, to ‘track down and unconditionally extradite money launderers’ and to ‘break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds’.” ”Yet these same world leaders cannot have missed the high degree of tolerance you have shown for such activities by your own cronies,” Ramesh said, attacking Modi.
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The opposition parties have alleged that the meltdown in Adani Group shares is a ”mega scam” that involves common people’s money as public sector LIC and SBI have invested in them and have questioned the government on steps taken by it.
Ramesh said there are serious charges of ”brazen stock manipulation” against the Adani Group.
”The collapse in publicly-listed stock prices following the publication of these allegations has financially damaged lakhs of retail investors who invested in Adani Group stocks after being duped by artificially-inflated prices. The value of Adani Group stock crashed by Rs 9,50,000 crore between January 24 and February 6, 2023,” Ramesh said.
He said that on July 19, 2021, the Ministry of Finance had ”admitted” to Parliament that the Adani Group was under investigation for violating SEBI regulations.
”Yet Adani Group stock prices were allowed to spiral after that. When will SEBI be held accountable for this serious lapse and allowing the destruction of huge retail savings? Did the Modi government put pressure on SEBI to go slow in its investigation?” he said.
Ramesh said that for all his talk of cracking down on illicit flows of black money, the prime minister’s ”favourite business group” is alleged to have manipulated stock prices using offshore shell companies and related parties posing as investment funds to bypass SEBI regulations.
”One of the egregious cases is that of the Monterosa group that has owned as much as USD 4.5 billion (Rs 37,000 crore) of Adani Group stock. The CEO of this supposedly independent firm is allegedly linked to a fugitive diamond merchant whose son is married to Vinod Adani’s (Gautam Adani’s brother) daughter. Other large funds are known to invest almost exclusively in Adani Group companies, which is unusual for an investment fund,” he claimed.
The finance ministry told Parliament that SEBI had frozen the accounts of certain funds operated by the Monterosa group in 2016, but no further action is evident, Ramesh said.
”What has SEBI done to properly investigate these dubious benami companies,” the Congress leader asked.
”If not, what is the leverage that the Adani Group exercises that has prevented the full force of India’s regulators and investigative agencies from unravelling the truth? What did Gautam Adani discuss in person with SEBI chairperson Madhabi Puri Buch in October 2022?” he alleged.
Ramesh also claimed that the inclusion of Adani Enterprises in the widely used National Stock Exchange (NSE) Nifty 50 index in September 2022 has proven ”controversial”.
”It had questionable fundamentals, an excessive price-to-earning ratio and a tiny free float. Adding Adani Enterprises compelled seemingly conservative Nifty index funds to make significant purchases of this risky stock, including the Employees Provident Fund Organisation, India’s largest pension fund,” Ramesh claimed.
In 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, he claimed.
”Is it not SEBI’s responsibility to protect investors by taking strict action?” Ramesh said.
Is there pressure from the Prime Minister’s Office on the NSE and SEBI to go easy on the Adani Group in an effort to bail it out, the Congress general secretary asked.