New Delhi: The Indian financial system has been put at risk of systemic instability allegedly due to the “brazen” corporate fraud committed by the Adani Group, according to a US investment firm Hindenburg Research.
Congress has called for an investigation into the allegations and expressed concern over the considerable investments made by strategic state entities such as LIC, SBI and other public sector banks in the Adani Group.
Leading public sector banks have responded to the issue, saying that their exposure to the Adani Group is within the limits prescribed by the Reserve Bank of India.
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SBI Chairman Dinesh Kumar Khara said that the bank has not raised any funding from the Adani Group in the recent past, and will take a “prudent call” on any future funding request.
Meanwhile, LIC remains undeterred and is investing about $37 million as an anchor investor in a $2.5 billion new share sale by Adani Enterprises Ltd. The Adani Group has denied the allegations and is exploring legal action against Hindenburg Research.
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Responding to this, Hindenburg said that Adani should file suit in the US, as they have a long list of documents they would demand in a legal discovery process.
Some now said that the implications of the fraud allegations on the savings of crores of Indians in financial institutions such as LIC and SBI have raised serious concerns.