Letter to the Readers, Mainstream, Feb 4, 2023

Letter to the readers, Mainstream, Feb 4, 2023

The National Budget 2023-24 presented in Parliament this week had major cuts in key areas of social spending —employment, nutrition, health, education, and economic commitments towards the peasantry— triggering sharp disapproval from the social democratic opposition, the left, and from social movement groups. The process got overshadowed by news of a market meltdown of the share values of one of India’s biggest business conglomerates. In five days flat the Adani group of companies lost a spectacular 108 billion dollars worth of assets. On Jan 24, 2023 Hindenburg Research a small investment research firm based in New York made public a stinging report that claimed that the Adani group was engaging in market manipulation, fudging accounts, and fraud over the years. The Adani group has dramatically expanded in size since 2014 under very privileged relations with the Modi Government to obtain giant Governmental contracts in areas of its business interests. It is India’s largest private operator of ports, airports, grain storage silos, and has a major presence in the cement industry, highways, green energy projects, coal mining, gas, and thermal power in India and with interests in Australia, Myanmar, and Israel among other places. The Adani group has very high debt levels and despite that, it has managed to obtain funding. Many public sector banks like the State Bank of India have funded billions of dollars worth of business ventures of the Adani group, in addition, there has been increasing involvement of the SBI Employee Pension Fund, SBI Life, and Life Insurance Corporation. The big problem here is that the hard-earned savings of several million Indians are “endangered” through investment in Adani Group companies. The Adani group has some 25,000 employees and an estimated say 25,000 people may be connected as its external contractors/suppliers and dependent businesses etc. A contraction of the group’s activities could also spark big job losses, trigger wider panic nationally. Regulatory authorities were clearly sleeping at the wheel, the Central bank, the taxmen, the auditors, the bankers, the National Stock Exchange, and the Government must control the damage here. There are big questions over corporate governance, corruption in India, and the bending of rules for some favoured ones. The Hindenburg report on Adani has naturally triggered big reactions in investment and business circles world-wide. Adani group’s overseas dollar bonds worth nearly 8 billion dollars expose over 100 international financial entities and partnerships with prominent business figures from Malaysia, the UK, the US, France, and several countries of the Middle East and so on. The Modi Government has so far blockaded any discussion on the Adani Scam in the national Parliament. The united opposition parties have rightly demanded a thorough probe via a Joint parliamentary committee or a Supreme Court-monitored probe. The opposition parties must make the Central Government see reason and investigate malpractice, the implications are serious. This is too big to be hushed up, with international implications, and can’t be seen as an internal matter by a country drum beating its rotating presidency of the G20.

February 4, 2023 - HK