NEW DELHI – The Congress on Thursday said that the Adani Group has had a “track record” of share manipulation and asked how the entire range of regulators and investigation agencies failed to investigate such “unnatural share price volatility” of its companies.
The party has been persistent on its attack on the Narendra Modi government weeks after Adani Group stocks took a beating on the bourses after US-based Hindenburg Research made a litany of allegations, including fraudulent transactions and share-price manipulation.
The Gautam Adani-led group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
Posing a set of three questions to Prime Minister Narendra Modi as part of the party’s “Hum Adani ke Hain Kaun” series, Congress general secretary Jairam Ramesh said the stock market capitalisation of the Adani Group soared by 1,000 per cent in three years — from Rs 2 lakh crore in 2019 to more than Rs 20 lakh crore in 2022 — before crashing in 2023, reported PTI.
“This is a very rapid growth rate for any large conglomerate and it is no coincidence that this surge strongly resembled a previous stock market scam in which the Adani Group was also involved,” Ramesh alleged.
“As we pointed out in the February 13, 2023 ‘Hum Adani ke Hain Kaun’, a 2007 SEBI ruling following an investigation into excessive volatility in the shares of Adani Exports (now known as Adani Enterprises) between 1999 and 2001 had found that entities associated with the notorious stock manipulator Ketan Parekh had indulged in ‘manipulative activities such as synchronised trading/circular trading and creation of artificial volume to influence the price in the scrip of Adani’ and that the ‘promoters of Adani Group aided and abetted’ these manipulations,” the Congress leader claimed.
Given this track record, how did the entire range of regulators and investigation agencies fail to investigate such “unnatural share price volatility”, Ramesh asked.
“What has been the reputational damage to India of such blatant fraud by your favourite business group and your seeming complicity in this?” he asked.
Ramesh claimed that the Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs had filed a charge sheet in 2012 accusing the Adani Group and Ketan Parekh of making fraudulent gains of Rs 388.11 crore and Rs 151.40 crore respectively by manipulating shares of Adani Exports.
It had also lodged cases of cheating and criminal conspiracy against Gautam Adani and Rajesh Adani, he said.
“A Mumbai sessions court upheld the SFIO investigation on November 27, 2019 stating that it had ‘prima facie’ established that the accused had made an ‘unlawful gain’ via stock manipulation.
“The SFIO then went into a slumber and woke up a month after the Hindenburg revelations, prompting the Bombay High Court to ask on February 22, 2023 whether the SFIO had sought a hearing because of the ‘scenario outside’,” Ramesh said.
Did the government put any pressure on the SFIO not to pursue its investigation of cheating and criminal conspiracy against the prime minister’s “cronies”, Ramesh asked.
“What happened to your proud boast of ‘na khaoonga na khane doonga’?” the Congress general secretary asked the prime minister.
Citing the allegations the Congress made on Wednesday about “close links between Elara Capital and Ketan Parekh”, Ramesh claimed a close relative of Parekh had previously worked with Elara Capital.
“The firm is also known to have had a relationship with chartered accountant Dharmesh Doshi, a Parekh associate who absconded from India in 2002. Given these multiple links between Parekh and the Adanis, how did your favourite business group manage to get away with the same scam for a second time, this time on a global scale,” he asked.
Ramesh urged the prime minister to break his “silence” on the issue.