Indian prime minister Narendra Modi’s opponents seize on Adani Group woes

India’s business world and market circles have been consumed by the crisis engulfing the nation’s celebrated Adani Group in recent days, but in one place the issue has gone undebated: parliament.

India’s small but vocal opposition has demanded an opportunity to quiz the government about the woes at the group chaired by Gautam Adani, a longtime ally of Prime Minister Narendra Modi.

But the presiding officers of both house of parliament, which are dominated by Modi’s ruling Bharatiya Janata party, have rejected all calls for debate on the issue.

The ports-to-energy conglomerate, one of the country’s largest, has lost more than $100bn in value following a scathing research report from short seller Hindenburg Research last month that accused it of stock price manipulation and accounting fraud.

The allegations, which Adani has strenuously denied, are an increasing focus of dispute between government supporters and opposition MPs eager to seize on a scandal they believe could enmesh Modi and his ruling Bharatiya Janata party.

On Monday members of the Congress party, India’s biggest opposition group, demonstrated outside parliament to demand answers about developments at Adani, which was last week forced to withdraw a $2.4bn share offering.

Protesters also gathered near the state-owned Life Insurance Corporation of India and State Bank of India, which both have exposure to Adani, calling for the government to allow debate over the potential loss of taxpayers’ money.

“The government is scared about having a discussion on Adani in parliament,” Rahul Gandhi, a Congress leader and member of parliament, said on Monday. On Tuesday, Gandhi slipped multiple references to Adani into a speech responding to an unrelated presidential address.

Gandhi has for years railed against Adani and other big business groups he claims have cashed in on alleged ties to Modi’s government — a frequent line of attack against the popular prime minister, who is on track to win a third term in elections next year.

Those criticisms were given renewed impetus by the Hindenburg report, the result of a two-year investigation, which accused the Indian group of operating a network of offshore entities to conceal the extent of the Adani family’s control, skirt rules on holdings of listed companies and boost stock prices.

Adani categorically rejected the claims made in the report, describing them last week as baseless and a “calculated attack on India” and its institutions.

Yet the government has remained mostly silent about the crisis that is assailing one of India’s most prominent tycoons while also raising questions about the integrity of the country’s capital markets.

Last Wednesday, as Adani’s scrapped share sale grabbed headlines, finance minister Nirmala Sitharaman unveiled a business-friendly budget meant to demonstrate the government’s economic competence.

At the weekend, Sitharaman weighed in on the Adani crisis, vowing regulators would “do their job” in response to Hindenburg’s allegations and insisting that “our macroeconomic fundamentals, our economy’s image . . . none of [it] has been affected”.

Researchers said pro-government social media users had swung into motion, with the hashtag #IStandwithAdani trending on Twitter as nationalists boosted a defiant and jingoistic narrative that described the Hindenburg report as a conspiracy.

“The big leaders of the BJP have generally stayed silent on the issue,” said Joyojeet Pal, associate professor at the University of Michigan’s School of Information. “But once the narrative changed from Adani to an ‘attack on India’, a couple of big influencers stepped in.”

Former cricketer Virender Sehwag, who describes himself as a “proud Indian”, claimed to his more than 23mn followers on Monday that “the hitjob on India’s market looks like a well-planned conspiracy”.

Jaggi Vasudev, a Hindu spiritual figure known as Sadhguru who has 4mn followers, tweeted on Sunday that foreign “hitjobs on India’s economy” were a “centuries-old” phenomenon. “If shining India is sore to some eyes, they need shades as India for sure will rise & shine,” he added.

Many Indians associate Adani with the prime minister. The group chair and prime minister are Gujarati compatriots whose ascents in business and politics coincided.

Adani has denied deriving any benefit from his acquaintance with Modi, but the questions raised over his group mark the second public embarrassment for the government in less than a month.

In January, the BBC aired a two-part documentary about Hindu-Muslim religious bloodletting that killed more than 1,000 in Gujarat in 2002, when Modi was the state’s chief minister. New Delhi blocked the film and ordered social media companies to take down links to it. Online, many Indians defended Modi’s reputation and attacked the film.

Now, the prime minister’s economic model, built on billionaire-led conglomerates such as Adani’s, is also being questioned. Near the Life Insurance Corporation headquarters on Monday, a small group affiliated with Congress posed with cash-stuffed suitcases and held up a giant mock cheque made out to “Modi’s friend Adani”.

“The clouds of danger are hovering over people’s heads due to the crash of Adani shares,” said Purna Chandra Padhi, general secretary of the Congress’s youth wing.

Veteran Indian politics watchers expressed doubts that the scrutiny of Adani would have a decisive impact on Modi’s continuing high popularity.

“I’m very sceptical this is going to have legs,” said Milan Vaishnav, south Asia director at the Carnegie Endowment for International Peace. “I think this story is complicated and not easily digestible for the common person on the street, as it involves allegations about issues like share offerings, financial flows and corporate governance.” 

Pratap Bhanu Mehta, a senior fellow with the Centre for Policy Research think-tank, said: “In previous episodes where business-state relations became a big political corruption issue, there were also fears of an economic downturn.” Given India’s current economic stability, he added that there was “no deep economic discontent to feed off”.