NEW DELHI (AP) — Hundreds of demonstrators from India’s main opposition party turned out Monday in India’s capital New Delhi and other cities demanding an investigation into allegations of fraud and stock price manipulation by India’s second-biggest business group, headed by coal mining tycoon Gautam Adani.
The Adani Group said Monday that its major investors, known in India as “promoters,” had pledged to prepay $1.1 billion in share-backed loans due for repayment by September 2024. The repayments include shares in Adani’s ports business, Adani Green Energy and Adani Transmission.
Shares in Adani Ports & Special Economic Zone jumped 9% after the announcement.
Members of the opposition Congress party have been urging Prime Minister Narendra Modi to order an investigation into Adani Group companies after a U.S.-based short-selling firm, Hindenburg Research, accused them of various fraudulent practices. The Adani group has denied any wrongdoing.
In New Delhi, Congress Party workers threw fake currency notes in the air and chanted slogans. Some burnt a suitcase plastered with images of Prime Minister Narendra Modi and Adani. Some protesters scaled police barricades and were detained and taken away in police vans.
Opposition party workers in the financial capital, Mumbai, and in the southern city of Chennai gathered outside the offices of a state-run bank and the country’s largest insurer, which known to have investments in Adani shares.
So far, there is no sign the fracas was spreading across India’s financial sector and the protests are more a reflection of political theater rather than spontaneous public outrage. Lawmakers disrupted Parliament proceedings for a third day on Monday as calls mounted for India’s market regulator to look into Hindenburg’s claims.
Adani and his companies have lost tens of billions of dollars as investors dumped their shares. Last week, the Adani Group cancelled a $2.5 billion share offering, promising to provide refunds to investors.
The billionaire’s fortune had swelled by more than 2,000% in recent years. Critics say he has benefited from strong relationships with Modi and his government, while others point out he also prospered under previous administrations.
“What action has been taken, if ever, to investigate the serious allegations made over the years against the Adani Group?” Jairam Ramesh, the Congress Party’s general secretary, said in a statement issued over the weekend. “Is there any hope of a fair and impartial investigation under you?” he said in a reference to Modi.
Shares in Adani Enterprises, the group’s flagship, wobbled Monday and were down 2.1% by mid-afternoon Monday. Its market value has shrunk by more than 50% since the Hindenburg report. Stock in five other Adani listed companies fell 5% to 10%.
The move by Adani to repay share-backed borrowing early addressed one of the key concerns raised by Hindenburg: heavy borrowing using group shares as collateral. Adani said in a written statement that the pledge by major shareholders to repay that debt was “in continuation of promoter’s assurance to prepay all share-backed financing.”
The wild swings in share prices have highlighted concerns over corporate governance, especially as the country tries to woo foreign investors.
On Saturday, the Securities and Exchange Board of India (SEBI) issued a rare statement seeking to calm investors.
“During the past week, unusual price movement in the stocks of a business conglomerate has been observed,” India’s market regulator said, without naming the Adani Group. It said mechanisms were in place to deal with volatility in specific stocks. The SEBI would examine any information before taking “appropriate action,” it said.
Finance Minister Nirmala Sitharaman on Friday dismissed concerns the controversy would alarm global investors, saying India’s financial markets are “very well regulated”.
Hindenburg’s report said it was betting against the seven main publicly listed Adani companies, judging them to have an “85% downside, purely on a fundamental basis owing to sky-high valuations.”
Adani built a fortune in trading and in coal mining and then branched into construction, power generation, operation of ports and airports, manufacturing defense equipment and running a media company.
Before the latest troubles, Bloomberg’s Billionaire Index listed Adani as Asia’s richest person and the world’s third wealthiest. Bloomberg’s rankings now put him at 21st wealthiest after his net worth sank to $59 billion from $120 billion.