RBI should probe LIC, Public Sector Banks’ losses due to adani stock rout: Congress

Congress chief Jairam Ramesh has written to SEBI chairman and RBI Governor urging them to examine the impact of economic irregularities of Adani Group on Public Sector Banks(PSB) and the Life Insurance company of India.

In his letter to SEBI, he wrote that a number of Indian residents had been disturbed by the allegations that the Adani Group has indulged in “brazen stock manipulation” and “accounting fraud” through “an unlimited labyrinth of offshore shell entities”.

“Apart from the potential violation of a number of Indian legal guidelines, this goes in opposition to the whole lot that the Securities and Exchange Board of India (SEBI) stands for. We urge you to examine all potential violations and to guarantee full transparency about who’s investing in Adani Group corporations.

“Given the Adani Group’s measurement and political connections, it’s incumbent that such investigations are seen as truthful and full, with no favour proven to the influential enterprise group. Any failure to achieve this will forged a shadow on Indian company governance and on India’s monetary regulators, and will have an effect on our means to elevate funds globally.”

LIC, he mentioned, which 30 crore Indians belief with their life financial savings, has misplaced 1000’s of crores in Adani Group stock in current days. “Should we not make sure that such public sector monetary establishments are extra conservative of their investments than their non-public sector counterparts and free from strain from above?

Meanwhile, within the letter to RBI, Jairam wrote ,”The RBI should look into two features: One, what’s the true Adani Group publicity of the Indian banking system? Two, what are the express and implicit ensures that the Adani Group has been provided that it will likely be bailed out by Indian banks if overseas funding dries up?

“Will the RBI make sure that Indian banks should not compelled to step in to substitute for any shortfall in overseas financing, particularly given the Adani Group’s political connections? Public sector monetary establishments just like the Life Insurance Corporation of India and the State Bank of India have been unusually beneficiant to the Adani Group in recent times. The RBI should make sure that dangers to monetary stability are investigated and contained.”

Requesting RBI to take each doable step to shield India’s banks and monetary establishments, the Congress veteran mentioned, “We urge you to act within the nationwide curiosity to make sure that India’s taxpayers don’t pay the worth for the misgovernance and potential illegalities of 1 influential enterprise home.”

Last month, US-based short-seller agency Hindenburg Research printed a report accusing Adani Group corporations of participating in a long time of “brazen” stock manipulation and accounting fraud.

(With inputs from IANS)