Vote of confidence. Adani issue: Our expert regulators are seized of the matter, says FM

Finance Minister Nirmala Sitharman on Saturday hailed India’s regulators and said they are seized of the matter (Adani-Hindenburg matter).

“India’s regulators are very, very experienced and they are experts in their domain,” she said in a press conference after addressing the central board of the Reserve Bank of India here. She was responding to a question regarding the Centre’s proposed response to the Supreme Court on the issue of heavy loss to investors as a result of the Adani-Hindenburg matter.

On Friday, the Supreme Court said the interests of Indian investors need to be protected against market volatility in the backdrop of the Adani stocks rout, and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look into strengthening regulatory mechanisms. It also sought the views of the Securities and Exchange Board of India (SEBI) and the Centre on putting in place a robust mechanism since capital movement in the country is now “seamless” .

Since the Centre has to give its response to the Court on Monday, the Minister did not disclose what the content would be. However, she made a general observation on how vigilant regulators were. “Regulators are seized of this matter and they are on their toes as always, not just now,” she emphasised.

Over the last couple of weeks the Indian stock markets have borne the brunt of selling pressure after Hindenburg Research, a US short-seller hedge fund, levelled allegations against the Adani Group, accusing it of malpractice, including round-tripping and fraud. While the Rs 20,000-crore FPO by flagship Adani Enterprises was fully subscribed, the Group decided to scrap it on grounds that the stock was volatile and investors’ interests were paramount.

On February 4, in a post-Budget interaction with the media in Mumbai, the Finance Minister said the FPO pullout by Adani would have no impact on the perception about India. “Our macroeconomic fundamentals, the image of our economy, none of it has been affected. The fact that we have had $8 billion of foreign exchange reserve growth during the last two days shows that the perception about India and its inherent strength is intact,” she said, adding that FPOs will come and go and the Adanis were not the only ones to withdraw public issues.

Last Friday, she had said that Indian regulators are normally very, very stringent about governance practices and, therefore, one instance, however much talked about globally it may be, is not going to be indicative of how well financial markets are governed. She also assured that India would continue to enjoy high investor confidence. On allegations regarding high exposure to Adani group companies and price movement in the group companies, Sitharaman said that regulators such as the RBI and SEBI “will do their job. Regulators are independent.”

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