Cong urges RBI, SEBI to probe Adani Group

February 15, 2023 10:16

Senior Congress leader Jairam Ramesh has written to the Reserve Bank of India (RBI) Governor Shaktikanta Das and Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and sought an investigation into allegations of financial irregularities and stock manipulation against the Adani Group.

In his letter to Das posted on Twitter on Wednesday, Ramesh urged the RBI to ensure that "excessive debt exposure" by the Adani Group currently and in the future does not destabilise India's banking system.

"The Adani Group has been described as 'deeply over-leveraged' -- if the Adani Group has artificially inflated the value of its stock through manipulation by offshore shell companies and raised funds by pledging those overvalued shares, the recent sell off in stock prices is creating vulnerabilities for the Adani Group to find financing, and by implication for India's banking system," the Congress MP said in his letter dated February 14.

Ramesh called on the RBI to look into two aspects what is the true Adani Group exposure of the Indian banking system and what are the explicit and implicit guarantees that the Adani Group has been given that it will be bailed out by Indian banks if foreign funding dries up.

"Will the RBI ensure that Indian banks are not forced to step in to substitute for any shortfall in foreign financing, especially given the Adani Group's political connections," Ramesh asked.

Public sector financial institutions like the Life Insurance Corporation of India and the State Bank of India have been "unusually generous" to the Adani Group in recent years, the Congress leader alleged.

The RBI must ensure that risks to financial stability are investigated and contained, he said in his letter. The risks of contagion from any collapse in the Adani Group's ability to secure financing must be monitored constantly, Ramesh argued.

"As the steward of the financial system, the RBI must do everything possible to protect India's banks and financial institutions, and we urge you to act in the national interest to ensure that India's taxpayers do not pay the price for the 'misgovernance' and potential 'illegalities' of one influential business house," he wrote to Das.

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