Adani crisis sparks protests and arrests; sell-off losses top $110
billion
Send a link to a friend
[February 06, 2023] By
Adnan Abidi, Aditi Shah and Sudipto Ganguly
NEW DELHI/MUMBAI (Reuters) -The crisis engulfing the Adani group
intensified on Monday as dozens of members India's main opposition party
were detained by police during protests, and parliament was suspended
again due to disruptions over the saga.
Adani shares continued their freefall, with the conglomerate's
cumulative market value loss topping $110 billion.
The crisis was triggered by U.S.-based short-seller Hindenburg
Research's Jan. 24 report that accused the Adani group of stock
manipulation, unsustainable debt and use of tax havens.
The Adani group, one of India's top conglomerates, has rejected the
criticism and denied wrongdoing in detailed rebuttals, but that has
failed to arrest the unabated fall in its shares.
In New Delhi's Jantar Mantar, a Mughal-era observatory that doubles up
as a protest site for all causes, protesters held up banners and shouted
slogans against Adani group's billionaire founder Gautam Adani. Some
broke through barricades, forcing the police to detain them.
Hundreds of members of the Congress party gathered to protest across the
country, including outside several offices of state-owned insurer Life
Insurance Corporation (LIC) and State Bank of India (SBI), both of which
have exposure to Adani group companies.
At Jantar Mantar some members burnt a suitcase with an SBI logo on it.
Both houses of India's parliament were adjourned on Monday, the third
consecutive day, amid sloganeering and demands to launch an inquiry.
In the brutal fallout of Hindenburg's report, Adani group flagship
company Adani Enterprises Ltd was forced to abandon a $2.5 billion share
sale last week, and group chairman Gautam Adani lost his crown as Asia's
richest person and slipped down the global rankings of the wealthy.
Gautam Adani and India's Prime Minister Narendra Modi are from the same
state. Adani has denied allegations by Modi's opponents that he had
benefited from their close ties, and Modi's government has denied
allegations of favouring Adani.
[to top of second column] |
Activists of the youth wing of India's
main opposition Congress party try to break a police barricade
during a protest against what they say investments by Life Insurance
Corporation (LIC) and State Bank of India (SBI) in Adani Group, in
New Delhi, India, February 6, 2023. REUTERS/Adnan Abidi
CREDIT RATINGS WARNINGS
The stock market rout triggered a series of credit ratings warnings
on Friday with Moody's saying the group may struggle to raise
capital, and S&P cutting its outlook on two group companies.
Even attempts by regulators and the government to calm spooked
investors do not appear to be working.
The Reserve Bank of India said on Friday the country's banking
system remains resilient and stable. India's market regulator said
on Saturday the country's financial markets remain stable and
continue to function in a transparent and efficient manner.
SBI said on Friday it was not concerned about the exposure to the
Adani group, but further financing to its projects would be
"evaluated on its own merit".
India's divestment secretary Tuhin Kanta Pandey told Reuters on
Friday that LIC shareholders and customers should not be concerned
about its exposure to the Adani group.
Shares of Adani Enterprises sank 9.6% on Monday, taking its market
capitalisation losses to nearly $28 billion since the release of the
short-seller's report.
Adani Transmission Ltd dropped 10%, while Adani Green Energy Ltd,
Adani Total Gas Ltd, Adani Power, and Adani Wilmar fell roughly 5%.
Adani Ports and Special Economic Zone was the only stock to buck the
trend, rising 1.2%.
(Additional reporting by Nallur Sethuraman in Bengaluru, Shilpa
Jamkhandikar in Mumbai; Editing by Savio D'Souza and Muralikumar
Anantharaman)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |