Adani Group woes spark protests in India as stock turmoil turns political

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NEW DELHI — Hundreds of protesters from India’s main opposition party rallied Monday in the Indian capital New Delhi and other cities to demand an investigation into allegations of fraud and stock price manipulation by the second group. India’s largest corporation, headed by coal mining magnate Gautam Adani. .

The Adani Group said on Monday its main investors, known in India as «developers», had committed to prepay $1.1bn in equity-backed loans due September 2024. The repayments include shares in the ports business. of Adani, Adani Green Energy and Adani. Transmission.

Adani Ports & Special Economic Zone shares rose 9% after the announcement.

Members of the National Union of Indian Students at a protest in New Delhi on Monday.Sajjad Hussain / AFP – Getty Images

Members of the opposition party in Congress have been urging Prime Minister Narendra Modi to order an investigation into Adani Group companies after a US short-selling company, Hindenburg Research, accused them of various fraudulent practices. The Adani group has denied any wrongdoing.

In New Delhi, Congress Party workers threw counterfeit banknotes into the air and chanted slogans. Some burned a suitcase covered with images of Modi and Adani. Some protesters scaled police barricades and were detained and taken away in police vans.

Opposition party workers in the financial capital Mumbai and the southern city of Chennai rallied outside the offices of a state-owned bank and the country’s largest insurer, which are known to hold investments in Adani shares.

So far, there are no signs that the brawl is spreading across India’s financial sector and the protests are more a reflection of political theater than spontaneous public outrage. Lawmakers halted Parliament proceedings for a third day on Monday as calls mounted for India’s market regulator to investigate Hindenburg’s claims.

Adani and his companies have lost tens of billions of dollars as investors dumped their shares. Last week, the Adani Group canceled a $2.5 billion stock offering and promised to provide investors with refunds.

The billionaire’s fortune had increased by more than 2,000% in recent years. Critics say he has benefited from strong relations with Modi and his rule, while others say he, too, prospered under previous administrations.

«What steps, if ever, have been taken to investigate the serious allegations made over the years against the Adani Group?» Jairam Ramesh, the general secretary of the Congress party, in a statement issued over the weekend. «Is there any hope of a fair and impartial investigation under you?» he said he in reference to Modi.

Shares of Adani Enterprises, the group’s flagship, faltered on Monday, down 2.1% as of mid-afternoon Monday. Its market value has fallen by more than 50% since the Hindenburg report. Shares in five other Adani-listed companies fell between 5% and 10%.

Adani’s move to repay equity-backed loans early addressed one of the main concerns raised by Hindenburg: large loans using group shares as collateral. Adani said in a written statement that the commitment by major shareholders to repay that debt was «a continuation of the promoter’s guarantee to prepay all equity-backed financing.»

The sharp swings in share prices have highlighted concerns about corporate governance, especially as the country tries to attract foreign investors.

On Saturday, the Securities and Exchange Board of India (SEBI) issued an unusual statement that sought to calm investors.

«Over the past week, an unusual price movement was observed in the shares of a business conglomerate,» India’s market regulator said, without naming the Adani Group. He said there were mechanisms in place to deal with volatility in specific stocks. The regulator said it would review any information before taking «appropriate action.»

Finance Minister Nirmala Sitharaman on Friday dismissed concerns that the controversy could alarm global investors, saying India’s financial markets are «very well regulated.»

Hindenburg’s report said he was betting against Adani’s top seven publicly traded companies, viewing them at an «85% disadvantage, purely on a fundamental basis due to sky-high valuations.»

Adani made a fortune trading and mining coal and later branched out into construction, power generation, port and airport operation, defense equipment manufacturing and running a media company.

Faced with the latest problems, the Bloomberg Billionaires Index it listed Adani as the richest person in Asia and the third richest in the world. Bloomberg rankings now put him 21st among the richest after his net worth plunged from $120 billion to $59 billion.

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