The savings of millions of people in LIC-SBI are in danger due to the Adani-Hindenburg dispute! Know what the bank says

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New Delhi : Due to the dispute between the American financial research company Hindenburg Research and Adani Group, there is a possibility of danger on the savings deposited in financial institutions like Life Insurance Corporation of India (LIC) and State Bank of India (SBI). Shares of listed companies of the Gautam Adani-led group fell sharply on Friday after financial research firm Hindenburg accused the Adani Group of indulging in “open stock manipulation and accounting fraud”. Shares of Adani Total Gas fell 20 per cent, Adani Transmission 19.99 per cent, Adani Green Energy 19.99 per cent and Adani Enterprises 18.52 per cent on the Bombay Stock Exchange (BSE). At the same time, shares of Adani Ports and Special Economic Zone fell by 16.03 per cent, Adani Wilmar by five per cent and Adani Power by five per cent.

Congress demanded an inquiry

Meanwhile, India’s main opposition party Congress has demanded an investigation by Reserve Bank of India (RBI) and market regulator on behalf of Hindenburg Research on Adani Group. Congress General Secretary Jairam Ramesh has said in his statement that under normal circumstances a political party should not react to any research report prepared by a hedge fund on a private company or business group, but the Adani Group’s relationship by Hindenburg Research The Congress party has to give its response on the forensic analysis done in He said that this is because Adani Group has well-known relations with Prime Minister Narendra Modi since when he used to be the Chief Minister of Gujarat.

Threat to the savings of crores of Indians

Jairam Ramesh in his statement further said that in addition to the financial stability of the Adani group, the highest level of risky transactions with financial institutions such as Life Insurance Corporation of India (LIC) and State Bank of India (SBI), which are considered pillars of the financial system. And the savings of crores of Indians may be in danger. He said that it is also worth mentioning here that even in the report presented earlier, the Adani group has been shown as a ‘group with more debt than its capacity’. All these allegations require a thorough investigation by the institutions responsible for the stability and security of the Indian financial system like the Reserve Bank of India and SEBI.

India’s financial system in serious trouble

Jairam Ramesh claimed that the allegations of financial impropriety are very serious, but what is even more unfortunate is that the Modi government through indiscriminate investment in the Adani group by very important institutions like LIC, SBI and other public sector banks India’s financial system may fall into a serious systemic crisis.

LIC invests Rs 74,000 crore in Adani group companies

He said these institutions have heavily funded the Adani Group, while private sector financial institutions have refrained from investing in the Adani Group due to concerns over corporate governance and debt. 8% shares of LIC Management i.e. a whopping amount of Rs 74,000 crore have been invested in Adani group companies, which is its second largest holding.

SBI has given loan up to 40%

According to Jairam Ramesh, public sector banks have lent twice as much to the Adani group as private banks, with 40 per cent of the loans being given by SBI alone. This irresponsible attitude has put crores of Indians putting their savings in LIC and SBI at serious financial risk. He questioned that the Modi government may try to impose censorship, but in an age of globalization of Indian businesses and financial markets, can Hindenburg-like reports that draw attention to corporate misgovernance be simply brushed aside and merely labeled as ‘malicious’? ‘ can be dismissed by saying?

SBI not worried about Hindenburg’s revelations

On the other hand, after these allegations of Congress, SBI Chairman Dinesh Kumar Khara told the media that there is nothing dangerous in Hindenburg’s revelations made against Adani Group and we are not worried yet. Khara said the Adani group has not raised any funds from SBI in the recent past and the bank will “judiciously consider” any request for funds from them in the near future. At the same time, on the condition of anonymity, a bank official said that SBI has reached out to the company for clarification and only after that the board will take a decision on the bank’s risk to the group.

Loan given to Adani Group within permissible limit: BOI

At the same time, an official of another state-owned Bank of India (BOI) said that the loans given to the Adani group were within the permissible limit. A Bank of India official told the media that our exposure to the Adani group is below the large risk framework of the Reserve Bank of India. Adani Group’s interest payment on the loan has remained intact till last month. Bank officials of two other private lenders said they were not in a position to panic yet, but were on alert as per the report.

LIC careless despite Hindenburg report

Meanwhile, news is that LIC remains unfazed by Hindenburg’s allegations of fraud on the Adani group and is pouring more money into Adani’s flagship unit. According to a document, government-controlled LIC is investing around $37 million as anchor investor in the FPO launched by Adani Enterprises Ltd for $2.5 billion, which is equivalent to about 4.23 per cent stake in its total investment.

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