Indian parliament adjourns for second day over Gautam Adani scandal

Opposition members have been demanding a debate on alleged fraud in Mr Adani's companies

Indian multibillionaire Gautam Adani has denied that his financial achievements were related to Prime Minister Narendra Modi. AFP

Indian parliamentary proceedings have been adjourned until next week after opposition parties stepped up pressure on Prime Minister Narendra Modi’s government for a parliamentary investigation into the stock market rout in billionaire Gautam Adani’s companies.

Members from political parties led by Indian National Congress, the main opposition party, have been demanding a debate on alleged financial fraud by Mr Adani following a report by US short-seller Hindenburg Research.

As soon as the session opened on the second day of the Budget session, Congress and DMK members stormed to the well — the area where the speaker sits.

They called for a joint parliamentary investigation into allegations of purported corporate malpractice, “brazen” market manipulation and accounting fraud in Mr Adani's port-to-energy business empire.

Opposition members had demanded a discussion on the alleged fraud on Thursday as well, but the speakers of both houses rejected the request and adjourned parliament.

Earlier on Friday, 16 political parties met Congress chief Mallikarjun Kharge to devise a joint strategy.

Congress has also planned nationwide protests on Monday to highlight alleged fraud that could affect millions of small investors in the country.

Fears for small investors

The Adani Group has received billions of dollars in investment from public-sector banks such as the State Bank of India and the country’s largest insurance company, Life Insurance Corporation of India, triggering fears that the slump in its shares over the past week will affect millions of small Indian investors.

But India’s Finance Minister Nirmala Sitharaman told a news channel on Friday that despite the free-fall in Adani Group's stock, public sector institutions were sitting on profits and that the country had a robust financial regulatory system.

“They [the SBI and LIC] have very clearly said that their exposure is very well within the permitted limits and that they are even now with the valuation falling as well, are still sitting over profits,” she said, in an interview with News18.

Opposition leaders have accused Mr Modi’s government of “forcing” the LIC and State Bank of India to invest in Adani companies.

“All the opposition parties unitedly want to discuss this extremely important issue as it affects the citizens of this country,” Congress parliamentarian Shashi Tharoor said.

“Our government doesn't see the merit of it. So they are stalling. As a result, now we have lost two days.”

Mr Modi has long been accused of being close to Mr Adani and critics have claimed that he has supported the conglomerate's mercurial rise over the past few years.

Mr Adani, who did not finish formal education, on Friday denied that his achievements were related to Mr Modi, saying his “professional success is not because of any individual leader”.

“These allegations are baseless,” the tycoon told India Today, adding that their shared origins made him an “easy target” for such claims.

Both Mr Modi and Mr Adani are from western Gujarat state.

Meanwhile, Mr Adani, who was the third richest person in the world before the Hindenburg report was released, tumbled out of the world’s top 20 richest people list on Friday after shedding another $10.7 billion of his net worth, as the market value of his Group companies has halved in a rout that started last week, according to the Bloomberg Billionaires Index.