(Bloomberg) — The Adani group has cast its spat with a US short seller as an attack on India and the matter could overshadow parliament’s budget session with opposition lawmakers highlighting ties between the man more rich man of Asia and Prime Minister Narendra Modi.
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“The Adani Group is no ordinary conglomerate – it has been closely identified with Prime Minister Narendra Modi since he was prime minister,” said Jairam Ramesh, general secretary of the opposition Congress Party, days after Hindenburg Research alleged manipulation of inventory and fraudulent accounting by the conglomerate.
Parliament is due to meet this week for its crucial budget session, in which on Wednesday the government will unveil its last budget for the full year before Modi seeks a third term in elections due in less than 15 months.
“We will certainly raise it in parliament. In what form and when we will decide later. It’s a serious matter,” Sougata Ray, an opposition lawmaker from the All India Trinamool Congress, said in a telephone interview. At least two other opposition parties will raise the issue.
The government has so far remained silent on the matter. Parliamentary Affairs Minister Pralhad Joshi could not immediately be reached for comment.
Billionaire Gautam Adani, widely perceived to be close to Modi, described the Hindenburg Research allegations as an attack on his home country in an attempt to win the support of nationalists. The tycoon has often aligned his activities with Modi’s development goals, building capital-intensive infrastructure such as ports and airports.
“This is not just an unwarranted attack on a specific society but a calculated attack on India, on the independence, integrity and quality of Indian institutions, on India’s history of growth and ambition,” he said Sunday Adani in his 413-page response.
It was not the first time that the group expressed the dispute in nationalistic terms. Soon after the report was made public on Jan. 24, Adani Group Chief Financial Officer Jugeshinder Singh released a video statement in which he refuted the allegations with a huge Indian flag flying in the background.
Hindenburg said the response failed to answer most of his questions and “predictably tried to draw attention away from substantive issues and instead fueled a nationalist narrative.”
“In short, the Adani group has attempted to merge its meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself,” Hindenburg’s response added.
Adani’s meteoric rise closely mirrored Modi’s journey to India’s top political post. Soon after Modi became chief minister of the western state of Gujarat, where they are both from, he faced fierce corporate censure over religious riots that erupted in 2002. Adani defended him and created a biennial “Vibrant Gujarat” investment summit who polished Modi’s pro – corporate credentials.
The billionaire’s face-to-face with the short seller has dominated social media in India. The hashtag #AdaniGroup was trending on Twitter Monday morning with people voicing opinions on both sides of the debate.
“These kinds of relationships where you yourself are making money have to be taken for granted,” said Ashwani Mahajan, co-host of the Rashtriya Swayamsevak Sangh-affiliated Swadeshi Jagran Manch — the ideological parent of Modi’s Bharatiya Janata Party. “Adani is not burning cash, assets are being built. This will not affect broader sentiment towards India.”
The question and answer comes during the last leg of Adani Enterprises Ltd.’s next offer, which is expected to close on Tuesday. It received overall subscriptions of 1% on Friday as bonds and shares of Adani entities tumbled, some of their daily limits of 20%. Adani himself lost more than $20 billion of his personal wealth last week in the stocks’ rout.
–With assistance from Sudhi Ranjan Sen.
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