By Krishna Jha
Prime Minister Narendra Modi has blocked the demand raised by the Opposition in the Parliament for an enquiry to be monitored by the Supreme Court or to set up Joint Parliamentary Committee to investigate the Adani group’s manipulations of the stock market and fraud and into the allegations levelled against the industrialist Gautam Adani himself and his company by Hindenburg Research. The step reconfirms the Centre’s patronage for the Adani group. Adani’s own response to Hindenburg’s allegations which runs in 413 pages is a blatant attempt to deflect the serious charges of fraud against the group. The company called the allegations “calculated attack on India, its independence, integrity, and quality of Indian institutions, and also the growth story and ambition of India.”
Gautam Adani, founder and chairman of Adani group, has acquired a net worth of roughly 120 billion dollars, adding over hundred billion over the past three years largely through stock price appreciation in the group’s seven key listed companies which have spiked an average of 819 percent in that period.
The Hindenburg Research has claimed to investigate how the world’s once third richest man is pulling the largest con in corporate history, by speaking to people, including former senior executives of Adani group and taking up many other authentic sources. Its key listed companies have also taken substantial debts, including pledging shares of their inflated stock of loans, putting the entire group on precarious financial footing. The documents studied were in thousands, and conducting diligence site visits in almost half a dozen countries. Even if the findings of Hindenburg Research are not considered, and one takes up the financials of Adani group at face value, its seven key listed companies have 85 percent downside purely on a fundamental basis owing to high valuation.
The group’s very top ranks and eight of twenty two key leaders are Adani family members, and places control of the groups financials in only the hands of a few. Hence it is called ‘a family business’. Gautam Adani’s elder brother, called an ‘elusive figure’, has been always found at the centre of the investigations conducted by any government into Adani group for his alleged role in managing a network of offshore shell entities used to facilitate fraud, the research said. In fact Vinod Adani, through various associates, manages a vast labyrinth of offshore shell entities.
In fact it has been reported that the valuations of Adani’s companies flew to the highest skies in the past three years, between April 2020 and August 2022. The value of its stocks rose nearly four thousand percent. After the fall in the stocks, the ratings of these companies are facing a decline.
A section of the securities of the group that Credit Suisse had assigned a lending value of 75 percent, are now rated zero. The conglomerate finds it impossible to raise money. The American investment bank Citigroup has refused to give loans to the group against securities. The share sale also has been facing the brunt, causing heightened scrutiny. According to reports, at least two more companies said to be from the Adani Group underwrote and likely bought in the share sale. Hindenburg Research says they have been helping the Adani Group engage in corporate malfeasance. The conglomerate denied the links.
The Adani share sale was oversubscribed by rich Indian individuals at the last minute, after retail investors or non-professional investors stayed away.
It is common knowledge that Adani and Modi both hail from the western state of Gujarat. As Modi climbed through the political ranks, he also openly displayed a close friendship with Adani: he flew in Adani’s private jets during his election campaign, and again when he travelled from Gujarat to New Delhi to take office as Prime Minister. In those days, Adani became richer by nearly 230 percent. Much of it has been credited to the Indian government’s mass privatization drive and business-friendly policies, which saw Adani winning several government tenders and infrastructure projects in ports, airports, roads, rail, fossil fuels, and green energy across the country. It was a process of building a nation, as Modi called it.
This ‘nation building’ has encroached in the Budget too, offering mega profits to the rich while taking away the means of livelihoods from the common masses. The protests have been raised demanding job-inclusive investments as well as hikes in social security spending.
There is a visible fall in the allocations in real terms for MNREGA, social security, pensions, child nutrition programmes and maternity benefits. The budget fails to take notice of how people are left starving as they have almost nothing to purchase even food. In the budget there should have been provisions for funds to increase people’s purchasing power with job generation and boosting the growth of domestic demand. This budget fails to meet this situation. Fiscal federalism has been aggressively attacked as fund transfers to states have been restrained.
With the raising of curtain from almost the greatest con of the decade, it is the finance capital that emerges as the one that rules over the phase, matured and irresistible, serving the few at the cost of the rest, vast and starving. (IPA Service)