Stock bubble bursts

After the January 24 report by Hindenburg Research which alleged that the Adani Group had weak business fundamentals, and was involved in stock manipulation and accounting fraud, all hell literally broke loose across India. The total loss in the last eight trading sessions is worth around Rs 10 lakh crore. The market rout has also forced Adani Enterprises to shelve plans to raise close to $500 million via international bonds and a Rs 20,000 crore FPO. The opposition jumped to attack the Modi government for crony capitalism especially as the Adani group chairman is no other than Gautum Adani a close friend of prime minister Narendra Modi. The opposition has been demanding a debate in parliament on the issue but the government for reasons best known to it, has steadfastly refused the demand. The Budget session witnessed disruptions last week as the Opposition demanded a Joint Parliamentary Committee probe or a probe monitored by the Supreme Court monitored into the issue. Union parliamentary affairs minister Prahlad Joshi clarified that government has nothing to do with the issues related to Adani Group and by that logic, it meant that the government will not talk about it and that by disruption both houses of parliament, opposition has no other issues to raise. He also rejected the demand of a Joint Parliamentary Committee probe into the matter as demanded by the opposition. This left the opposition with no option but to create ruckus in frustration. The government has been saying all along that it is ever ready to debate or discuss issues on the floor of the house but when the opposition raised issues to be discussed, the government did not say no but why these could not be discussed. This was evident when the government refused to discuss the Indo-China border skirmishes, Pegasus row and the massive nationwide uproar when Ashish Mishra, son of union minister of state for home Ajay Mishra ‘Teni’, mowed down scores of farmers at Lakhimpur Kheri. The opposition demanded removal from the ministry of Ajay Mishra but the government refused even for discussing the matter in parliament. It may be recalled that during the UPA rule, the BJP was the main opposition and had justified disruption of parliament as legitimate democratic means. The Modi government had run through the three farm laws in September 2020 without any proper discussion and scrutiny by the relevant parliamentary committee. After managing to woo the agitating farmers, it again pushed through the repeal bill within minutes, refusing to allow any discussion. The Adani stock scam is serious as it has had a global domino effect of large financial institutions like Citigroup, Credit Suisse, and others distancing themselves from providing margin loans against Adani Group securities. Out of 10 Adani stocks, six were locked in their lower circuit limits. Even SEBI which oversees the stock market has not done anything after SBI posted a huge loss of around Rs. 80,000crore and LIC around Rs.70,000 crore. The opposition maintained that the money invested by SBI and LIC was hard earned money of the depositors and thus, constituted a serious fraud. Congress general secretary Jairam Ramesh on February 5 said that the Centre has maintained a “loud silence” which smacks of collusion. Perhaps that brings to mind an African saying, “If the dog is not barking when the thief is stealing, it means both are friends”.