Hundreds of demonstrators from India's main opposition party turned out Monday in India's capital New Delhi and other cities demanding an investigation into allegations of fraud and stock price manipulation by India’s second-biggest business group, headed by coal mining tycoon Gautam Adani.
In New Delhi, Congress Party workers threw fake currency notes in the air and chanted slogans. Some burnt a suitcase plastered with images of Prime Minister Narendra 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 in the southern city of Chennai gathered outside the offices of a state-run bank and the country's largest insurer, which known to have investments in Adani shares.
Members of the opposition Congress party urged people across India to protest, adding to pressure on Modi to respond to a massive sell-off of shares in Adani Group companies after a U.S.-based short-selling firm, Hindenburg Research, accused them of various fraudulent practices. The Adani group has denied any wrongdoing.
Adani, who is thought to have close ties to Modi, and his companies have lost tens of billions of dollars as investors dumped their shares. Last week, the Adani Group cancelled a $2.5 billion share offering, promising to provide refunds to investors.
Lawmakers disrupted Parliament proceedings for a third day on Monday as calls mounted for India’s market regulator to look into Hindenburg’s claims.
Adani's fortune had swelled by more than 2,000% in recent years. Critics say he has benefited from strong relationships with Modi and his government, while others point out he also prospered under previous administrations.
“What action has been taken, if ever, to investigate the serious allegations made over the years against the Adani Group?” Jairam Ramesh, the Congress Party’s general secretary, said in a statement issued over the weekend. “Is there any hope of a fair and impartial investigation under you?” he said in a reference to Modi.
Shares in Adani Enterprises wobbled Monday and were up 1% by mid-afternoon Monday. The flagship Adani company's share price has shrunk by more than 50% since the Hindenburg report. Stock in five other Adani listed companies fell 5% to 10%, while its ports subsidiary gained 8.6%.
So far, there is no sign the fracas threatens to spread across India's financial sector. But it has highlighted concerns over corporate governance, especially as the country tries to woo foreign investors.
On Saturday, the Securities and Exchange Board of India (SEBI) issued a rare statement seeking to calm investors.
“During the past week, unusual price movement in the stocks of a business conglomerate has been observed,” India’s market regulator said, without naming the Adani Group.
It said mechanisms were in place to deal with volatility in specific stocks. The SEBI would examine any information before taking “appropriate action," it said.
Finance Minister Nirmala Sitharaman on Friday dismissed concerns the controversy would alarm global investors, saying India's financial markets are “very well regulated”.
Hindenburg's report said it was betting against the seven main publicly listed Adani companies, judging them to have an “85% downside, purely on a fundamental basis owing to sky-high valuations.”
Adani built a fortune in trading and in coal mining and then branched into construction, power generation, operation of ports and airports, manufacturing defense equipment and running a media company.
Before the latest troubles, Bloomberg's Billionaire Index listed Adani as Asia's richest person and the world's third wealthiest. Bloomberg's rankings now put him at 21st wealthiest after his net worth sank to $59 billion from $120 billion.
