India’s opposition Congress party will ask for a parliament debate on tycoon Gautam Adani’s tussle with a US short seller and the impact of the resulting stock rout on millions of small investors, according to two people with knowledge of the matter.
(Bloomberg) — India’s opposition Congress party will ask for a parliament debate on tycoon Gautam Adani’s tussle with a US short seller and the impact of the resulting stock rout on millions of small investors, according to two people with knowledge of the matter.
The party has sent a formal letter to the chair of the upper house of parliament asking for suspension of regular business on Thursday to discuss public sector investments in “companies losing market value endangering the hard-earned savings” of millions of Indians, the people said, asking not to be identified as the matter was not public.
A spokesperson for the Congress party couldn’t immediately be reached for comment.
This is an indication that Adani’s woes could become a political headache for Prime Minister Narendra Modi, as he looks at a third term in office in elections due next year. Modi and the embattled Adani are known to be close. The tycoon has often aligned his businesses with Modi’s development goals, building capital-intensive infrastructure such as ports and airports.
The stock rout in Adani’s beleaguered empire has intensified to more than $100 billion, as the fallout from Hindenburg Research’s fraud allegations pushed the Indian billionaire to pull a record equity offering and announce a review of his capital market strategy.
The stock plunged 28% on Wednesday, prompting the company to abandon a $2.4 billion follow-on share sale to insulate investors in the offering from potential losses. Shares in the most of the nine other companies in the group also fell.
The group’s bonds also plunged to distressed levels, with banks either demanding more collateral for loans or scrutinizing the firms’ debt value to lend against.
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