Why Has the Adani-Hindenburg Issue Become a Matter of National Concern? Arun Kumar https://thewire.in/business/why-has-the-adani-hindenburg-issue-become-a-matter-of-national-concern The corporate members of the expert committee could have exposed much more of the wrongdoings but they have chosen to be formalistic. So, an opportunity to expose and clean up corporate manipulations has been missed.
Though his companies are public, the Indian public shareholding in his companies has been small. So, the Indian public has hardly benefitted from the rapidly growing pie. Even Indian mutual funds’ investment in his companies is small. The debt compared to equity was quite large and has been flagged by financial experts. A high ratio of debt to equity increases the riskiness of the shares. If profits earned are taken as a yardstick of performance, they were low compared to the price of the shares. This is referred to as the price-earning ratio (P/E).
Three important questions arise: first, how did Adani get hold of so many businesses so quickly? Second, how did the valuation of the shares of the Adani Group rise so rapidly? Third, why did the undue rise in the share prices not raise suspicions among the regulatory agencies – SEBI, the Enforcement Directorate, income tax department, etc.? Did political connections coupled with a lack of action, or investigation by the regulators help Adani acquire assets, possibly at low prices?