The serious allegation against the Adani group call for a proper investigation

After the Hindenburg Research on January 24 was published, the Adani shares started plummeting wiping off its sizable part of it $93 billion wealth. The Research Group has alleged that the Adani group has manipulated the stock market and indulged in financial fraud. The report l dwindled investors’ confidence and the Adani shares lost 20 percent in a week. This is a serious situation that could impact the country's economy as huge public money is riding on the Adani Group. Many banks that have lent money to the Adani group are already bearing the brunt. The government must take note of the situation and try to salvage the situation. It is too early to say whether the charges made by the Hindenburg Research of fraud and market manipulation are true or not but they definitely merit an investigation. There have been indications that not all was well with the growth of the Adani group. Its meteoric rise is one factor that raises eyebrows of the investors. Most of the companies listed by the Group are over valued, their shares selling several times their intrinsic value. If Adani Group is found to have manipulated the market then it would also mean that SEBI did not do its work properly or knew about it but did not act. That is fishy, to say the least. The Adani group has tried to debunk the report saying that the research group is all about short selling and it was contemplating legal action against it. However, Gautam Adani would do well to answer the 88 questioins posed by the research group to dispel all misgivings about it. Moreover it must clean about the 34 shell comapnies in the Muaritus which only deal in Adani shares and are managed by Gautam Adani’s brother.  

The banks that generously lent money to the Adani groups are having their stocks in the red. State-owned banks have generously lent money to Adani group  with 40 per cent of their lending being done by SBI, while LIC has exposure of the tune of Rs 36,000 crores which makes them vulnerable and put the economy on risk.  This is a serious situation and could snowball into a big national crisis. It could negatively impact the banking sector which is already under strain as its non-performing assets (NPA) have been rising steadily over the years. It would be nice if the Adani group comes clean on the charges posted against it, but if there have been irregularities then the law of the land should apply to him as it does to any other Indian citizen.