ADANIGATE

The explosive crisis is a defining test for India Inc and corporate governance. The government can soften the national and international fallout only by investigating the Gautam Adani affair thoroughly and with extensive public disclosure

- Sujit Bhar

THERE have been two very damaging after effects of the sordid affair involving Gautam Adani and his shady empire, as exposed by US “short-seller” Hindenburg Research and through the equally shady withdrawal of the apparently “oversubscribed” Rs 20,000 Follow-on Public Offering (FPO) of Adani Enterprises. The first was that a somewhat decent Union Budget’s sheen has been almost fully buffed out and secondly, and more disastrously, India’s position as a dependable financial giant before the world has been tarnished like never before.

This is not just a shameful episode in Indian corporate governance, but, considering the open closeness of Adani to the powers that be, it might translate to national embarrassment. This could lead to the immediate flight of foreign capital at the minimum, to a loss of long-term foreign investment, even with India bonds being downgraded in international markets. The unfolding of the acts of a single unscrupulous mind has the potential to derail the entire development and political process of the country.

In a year in which nine state elections are lined up, and racing into next year’s general elections, neither the government nor the Securities and Exchange Board of India (SEBI) can afford to be near the toxic influence of the Adanis. As of writing this, the Nifty index still had Adani Enterprises and Adani Ports and Special Economic Zone affecting its position. And this remains, even as, in the US markets Adani Enterprises (XBOM: 512599) shares face removal from the Dow Jones Sustainability Indices, effective prior to opening on February 7, 2023.