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India’s Modi hits back at opposition after Adani furore

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An activist with India's opposition Congress party shouts slogans in Kolkata as he burns an effigy of Prime Minister Narendra Modi and tycoon Gautam Adani to protest against the government's financial policies./AFP
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Feb 09, 2023 - 02:09 AM

NUEVA DELHI, INDIA — Indian Prime Minister Narendra Modi on Wednesday defended his record after criticism of his close association with tycoon Gautam Adani, whose business empire has been rocked by corporate fraud allegations.

Investors wiped out around $120 billion in value from Adani Group after claims of accounting fraud by short-seller US investment group Hindenburg Research last month.

Political opponents accuse Modi of abetting Adani’s rapid rise, allowing the billionaire to unfairly win contracts and avoid proper regulatory oversight.

Modi avoided addressing the cloud over Adani Group but said in parliament that the people of India trusted that his government acted with integrity.

“People know Modi has come to their help in times of crisis, how will they agree with your abuses and allegations?” Modi said.

“The trust of millions of people is my protective shield, it can’t be breached by your abuses and allegations.”

Modi was speaking a day after Rahul Gandhi of the opposition Congress party told the legislature that Adani’s close ties with Modi had led to “tremendous growth and expansion of his businesses”.

Hindenburg accused Adani of a “brazen stock manipulation and accounting fraud scheme” in “the largest con in corporate history”.

Adani artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens, the investment group said.

The conglomerate has rejected the claims as a “maliciously mischievous” reputational attack.

Adani, 60, was until last month Asia’s richest man but the stock market rout delivered a dramatic hit to his personal fortune, tumbling him down from third to 17th on Forbes’ real-time billionaires list.

Last week he insisted the “fundamentals of our company are very strong, our balance sheet is healthy and assets robust” in an attempt to dispel concerns over the conglomerate’s debt pile.

Shares in Adani Group’s listed entities have rallied significantly this week after it announced plans to repay $1.1 billion in early loans, a move meant to reassure investors.

Flagship Adani Enterprises was up 23 percent in Wednesday’s trade with significant gains in several smaller listed units.

Parliament has been adjourned several times in recent days with opposition parties calling for a probe into Modi and Adani’s links.

The Congress party staged protests around the country on Monday to demand a “serious investigation” into Adani’s conglomerate and potential exposure by public financial institutions.

Fitch Ratings said Tuesday that Indian banks’ exposure to the Adani group was “insufficient in itself to present substantial risk to the banks’ standalone credit profile”.

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