New Delhi: Opposition parties erupted in Parliament Thursday, demanding a discussion on conglomerate Adani Enterprises and the possible risk it poses to Indian investors following an American short-sellers’ attack on it last week.
The cumulative market capitalisation losses of the group, according to Reuters, is $100 billion since US whistleblower Hindenburg Research’s report on 24 January which claimed widespread financial malpractice in the company.
Amid noisy scenes in Parliament on Thursday morning, Lok Sabha was initially adjourned till 2 pm. Later, as protests spilled over to the Rajya Sabha, both Houses were adjourned for the day.
Congress President Mallikarjun Kharge later told reporters, “We have given the ‘suspension of business notice’ under Rule 267 to discuss the issue of investment by LIC, public sector banks and financial institutions in companies losing market value, endangering the hard-earned money of crores of Indians.”
The Congress and other parties have demanded a probe into the Adani crisis by a joint parliamentary committee (JPC) or a Supreme Court-monitored panel, which would report to them day to day.
It is learnt that the Reserve Bank of India has already asked other banks for details of their exposure to the Adani group of companies.
Ever since Hindenburg Research pointed out alleged fraud in the company, Adani group shares have gone on a downward spiral, plunging further on Thursday after chairman Gautamm Adani shelved an oversubscribed, Rs 20,000-crore follow-on public offer (FPO) yesterday.
Withdrawing the FPO Wednesday — which was 112% subscribed – Gautam Adani had said it would not be “morally correct” to go ahead in the present market condition.
“After a fully-subscribed FPO, yesterday’s decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, the board strongly felt that it would not be morally correct to proceed with the FPO,” he said.
Saying the decision would insulate investors from potential losses, Adani assured that the company’s existing operations and future plans would not be impacted by the cancelled FPO.
He also said once the market stabilised, the company would review its capital market strategy.
Also read: Adani Group’s surprising move — cancels fully-subscribed Rs 20,000 cr FPO ‘to insulate investors’