Indian government declines to comment on Adani group crisis; does silence imply acceptance?
The government on Wednesday denied commenting on the malpractices by the Adani Group that has been brought to light by the New York-based short seller company. The Hindenburg report has caused a loss of 90 billion USD in the firm’s shares, causing the stock’s valuation to plummet.
The Indian government has clearly stated that it would not comment on an individual company’s matters.
Economic Affairs Secretary has responded to the queries stating that the Indian government would not respond to any issue related to a particular company while he was conversating on the Post Budget interaction with legitimate media sources.
At the same time, V Anantha Nageswaran, the Chief Economic Advisor, has declined to comment on the issue. He remained silent when questioned about the consequences of the rout in Adani Group shares following the Hindenburg report.
The shares of the Adani Group have declined significantly and have lost more than 7 lakh crore INR or about 38 percent of the total market cap during the last five trading sessions, with increasing concerns on the reports.
The plummeting stocks have caused Adani to call off its FPO. In light of the ongoing controversy surrounding The Hindenberg Report, which the company has chosen to focus on, Adani Group announced on February 1 that it has cancelled all Follow-On Public Offerings (FPO) and will refund investors’ money. The Report has revealed debt issues and accused Adani Group of using tax havens.
In an exchange filing, the Group disclosed that the board of directors had decided against moving forward with the FPO to protect investors’ interests. The equity shares total 20,000 crores INR.
In response, Gautam Adani said that the decisions were made in light of the company’s trading history with falling stock prices. He claimed that the interests of the investors were crucial, so he decided to keep them from recovering damages.
The Hindenburg report has made a series of allegations, from fraudulent transactions to manipulation of the share prices by the Gujarat-based conglomerate. The information was released on January 24- the day Adani Group opened up a follow-on sale worth 20,000 crores INR for the anchor investors, while he has constantly denied the allegations imposed on him.
The Group has refuted the allegations, claiming that the story lacks solid support and has legal ignorance at its core. He has further refuted their claims by claiming that their balance sheets are exceedingly sound, with robust cashflows and safe assets. The business also has a stellar track record of tracking debts.
The Wednesday trading session has yielded the lowest record within the reading sessions, where three of the company prices have hit rock bottom.
Shares of Adani Enterprises have declined by 28.45 percent, which accounts for close to 2128.70 INR on the BSE despite the company’s retail sales meeting with huge success after the non-retail investors bid on the big volumes.
The retail investors and employees have declined to comment on the matter.
How strong was the impact of the Hindenburg report on the Adani-led group?
Adani Ports and Special Economic Zone stocks have slumped by 19.69 percent, the value of the Adani Total Gas has declined to 10 percent, and the Green Energy has further decreased by 5.78 percent. At the same time, the valuation of the stocks of Adani Wilmar has dropped to 4.99 percent Adani Power slumped to 4.98 percent, and Adani Transmission has declined by 2.46 percent.
At the same time, the price of the Ambuja shares has plunged to 16.56 percent while the ACC slumped to 6.34 percent and NDTV decreased by 4.98 percent.
The Gujarat-based conglomerate had come off big when he stated that the Hindenburg report and allegations on the group question the legitimacy of Indian institutions and their quality of practices. He has constantly tried to associate his success with the country’s well-being. He has attempted to instill a nationalist feeling among the investors, but his tactics have failed considerably as the Indian Government has declined to comment on the given matter.
The research organization claims that India’s economy is the most powerful and that the Adani Group is preventing its expansion while fraudulently plundering the country, making the scam by the Gujarat-based conglomerate just the canary in the coal mine.
Now, the question lies if the silence of the Indian government means acceptance of the malpractices by the Adani-led group.
Edited by Prakriti Arora