Were LIC, SBI told to invest in Adani Enterprises FPO despite stock crash? Congress asks PM Modi
Following the Hindenburg report, Adani Group lost nearly Rs 9 lakh crore in the share market bloodbath and was forced to call of its follow-on public offering.
The Congress on Saturday asked Prime Minister Narendra Modi whether it directed Life Insurance Corporation and the State Bank of India to invest tin the Adani Enterprises follow-on public offering despite a fall in its share price following the allegations of stock manipulation levelled by US-based firm Hindenburg Research.
Posing a set of three questions to the government as part of the party’s “Hum Adani ke Hain Kaun” series, Congress General Gecretary Jairam Ramesh asked Prime Minister Narendra Modi to break his silence on the issue.
In a statement, Ramesh claimed that LIC had bid Rs 299 crore in the FPO, SBI’s Employees’ Pension Fund 99 crore and SBI Life Insurance Company Rs 125 crore.
“These publicly owned institutions participated in the FPO despite the fact that the market price had dropped far below the issue price and that both LIC and SBI already owned large chunks of Adani Group equity,” the Congress leader asked. “Were instructions issued to LIC and SBI to deploy the savings of crores of Indians to once again bail out the Adani Group.”
The ports-to-energy conglomerate led by billionaire Gautam Adani has been steeped in a crisis since January 24, when Hindenburg Research alleged that the group has amassed substantial debt by pledging overvalued shares.
Since the report was released, Adani Group companies have lost nearly Rs 9 lakh crore in the stock market bloodbath.
In a brutal fallout, Adani Group flagship company Adani Enterprises was also forced to call off its Rs 20,000 crore FPO that was meant to repay debt. The Adani Group has alleged that the report’s “principal objective” was to derail the share offer.
On Saturday, Ramesh also asked if it was true that a Union minister who has longstanding commercial links had called five-six well-known businessperson, urging them to invest in the Adani Enterpirse FPO “to save Gautambhai from embarrassment?”
“Does this not represent a conflict of interest worth investigating?” he asked. “Did this Union minister act on instructions from you [Modi]?”
The Congress leader also asked if the family offices that were pressured to bail out the Adani FPO given assurances that this was only to save Gautam Adani’s reputation and that the FPO would be subsequently cancelled and the money returned to the investors.
“Is it not a violation of Indian securities regulations to hide this relevant information from most investors and only to share it with a select few?” he asked. “Is it ethical to dupe FPO investors in this way.”