Indian tycoon Adani hit by more losses; opposition MPs call for probe
- 03 Feb 2023
Shares in troubled Adani Enterprises gyrated on Friday, tumbling 30% and then rebounding after more than a week of heavy losses that have cost it tens of billions of dollars in market value.
The company, the flagship of India’s second-largest conglomerate, cancelled a share offering meant to raise $2.5 billion earlier this week after US short-selling firm Hindenburg Research issued a report accusing it of market manipulation and other fraudulent practices. Adani denies the allegations.
Opposition lawmakers blocked Parliament proceedings for a second day on Friday, chanting slogans and demanding a probe into the business dealings of coal tycoon Gautam Adani, who is said to enjoy close ties with Prime Minister Narendra Modi.
"We have no connection″ with the Adani controversy, Parliamentary Affairs Minister Pralhad Joshi told reporters outside Parliament on Friday.
In an interview with CNN News 18, Finance Minister Nirmala Sitharaman brushed off concerns that the losses would spook global investors and said India's financial market was "very well regulated.”
"As a result, the investors' confidence which existed before shall continue even now,” she said, adding that the controversy wasn't "indicative of how well Indian financial markets are governed.” At least one prominent international investor, French oil giant TotalEnergies, defended its investments in Adani. TotalEnergies said it has limited exposure to the current problems and has not re-evaluated its stakes in Adani businesses.
The French company said it had carried out due diligence when it making $3.1 billion in investments in Adani, and that the entities TotalEnergies invested in "are managed in accordance with applicable regulations.”
Amit Malviya, the governing Bharatiya Janata Party’s information and technology chief, said in a television interview that the opposition was using Adani’s crisis to target the Modi government over a private company's shares and their market movements. "Regulators are looking into” what happened, he said.
The market watchdog, the Securities and Exchange Board of India, has not commented. The Economic Times newspaper reported, citing unnamed SEBI sources, that it had asked stock exchanges to check for any unusual activity in Adani stocks.
Shares in Adani Enterprises fell as much as 30%, to Rs1,017 ($12), on Friday. At the end of trading, the price had recovered to Rs1,531 ($18.70) but was still down by 2%. The company's share price has plunged more than 50% since Hindenburg released its report last week, when it stood at Rs3,436 ($41). Stock in six other Adani-listed companies was down 5% to 10% on Friday.
