Indian politics roiled by fraud allegations against Adani group

• A US-based investment firm has accused the Adani group.
• The group has dismissed the allegations as malicious and untrue.
• But the response has failed to stop the fall in Adani shares, which have lost $108 billion in value.

A political controversy in India has been triggered by accusations of fraud made against the business empire of billionaire Gautam Adani by a US research firm.

On Friday, opposition leaders halted parliamentary business for a second day in a row by calling for a probe into the allegations.

Last Friday, the research company charged the Adani group companies with stock manipulation and financial fraud, which caused their shares to drop precipitously.

The group has refuted the charges.

The opposition leaders’ demand for an investigation caused the morning proceedings in both houses of India’s parliament to be suspended on Friday.

They have demanded the formation of a Joint Parliamentary Committee or a panel under the supervision of the Supreme Court to look into the accusations made against the company and the risk to Indian investors from the decline in the value of the Adani Company’s stock.

Following the publication of a report by US-based investment firm Hindenburg Research accusing the Adani group of decades of “brazen” stock manipulation and accounting fraud, the market capitalization of the Adani group’s enterprises has lost $108 billion in the last few days.

The group has dismissed the allegations as malicious and untrue, calling them an “attack on India”. But the response has failed to stop the fall in Adani shares.

Gautam Adani, the founder, has fallen out of the top 10 richest in the world. According to the Forbes real-time billionaires list, Mr. Adani is now the 15th-richest person in the world, with a net worth of $74.7bn. He was third on the list last week.

The billionaire runs Adani Group, one of India’s biggest companies. The flagship company, Adani Enterprises, has operations in a wide range of industries including commodities trading, airports, utilities and renewable energy.

Following the government’s rejection of the opposition’s requests to pause business to examine the Adani issue, opposition legislators disrupted parliamentary proceedings on Thursday as well.

“There should also be day-to-day reporting of the investigation on the issue,” Mallikarjun Kharge, chief of the main opposition Congress party, said.

The State Bank of India (SBI), a government-owned bank, and Life Insurance Corporation of India (LIC), a government-owned insurance company, have both been charged by the Congress with being coerced into investing in the enterprise, endangering the savings of citizens.

However, on Friday, India’s finance minister Nirmala Sitharaman told a news station that the two companies’ exposure to the Adani group was “well within the acceptable boundaries” while citing earlier declarations made by SBI and LIC.

She added that investor confidence would not be damaged and that India’s financial industry was “well-regulated.”

Additionally, the Congress has declared plans to stage statewide demonstrations on Monday outside the offices of Adani Group enterprises, nationalized banks, and government agencies.

Party leader KC Venugopal has accused the BJP-led government of “using common people’s money to support their closest friends”.

Mr. Adani, who is thought to be close to Prime Minister Narendra Modi, has long been the target of accusations from opposition lawmakers that he has benefitted from his connections to the political system, which he vigorously refutes.

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