The crisis engulfing India’s Adani group intensified on Monday when hundreds of supporters of India’s opposition parties took to the streets to demand an investigation into allegations by a U.S.-based short-selling firm against the conglomerate, sending its share price tumbling, Reuters reported.

Shares in billionaire Gautam Adani’s companies have been in freefall since a critical Jan. 24 report by Hindenberg Research, and total market losses now exceed $110 billion, raising fears of wider financial contagion.

Opposition parties, which last week called for a parliamentary commission to investigate the saga and disrupted proceedings, questioned Indian Prime Minister Narendra Modi’s closeness to Adani.

Protesters on Monday also expressed their anger over the investment by the Life Insurance Corporation and State Bank of India (SBI) in the Adani Group.

In a detailed reply, Adani rejected the Hindenberg report’s allegations of stock manipulation, use of tax havens and criticism of unsustainable debt.

The billionaire and Modi are from the same state, and Adani has repeatedly denied accusations by Modi’s opponents that he benefited from their close ties.

And the Modi government denies the allegations of favoritism to Adani.

At New Delhi’s Jantar Mantar, a Mughal-era observatory that functions as an all-cause protest site, protesters carried placards and chanted anti-Adani slogans.

Some broke the barricades, which forced the police to detain them.

“A common man has invested his money in a businessman’s (Gautam Adani) company and the government is trying to save him. The government is supporting the businessman (Adani) and not the common man,” Shiv Panday, general secretary of the Uttar Pradesh Congress Committee, told news agency ANI.

Hundreds of Congress Party members protested across the country, including outside several offices of state-owned Life Insurance Corporation (LIC) and State Bank of India (SBI), which have influence over Adani group companies.

At Jantar Mantar, some people burnt a suitcase with SBI logo. In Mumbai, a protester held a placard with Adani’s photo and LIC’s logo, explaining with a diagram “How much LIC has invested in Adani Group”.

LIC holds a 4.23% stake in flagship firm Adani, while its other exposures include a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.

SBI said last week that its total exposure to Adani Group was 0.9 percent of the loan portfolio, or about 270 billion rupees ($3.30 billion).

LIC and SBI did not respond to a request for comment.

Also, Adani Group’s move on Monday to calm investor nerves failed to stop the market from falling.

It said it would prepay about $1.1 billion in loans secured by shares in Adani Ports and Special Economic Zone, Adani Transmission and Adani Green Energy, allowing it to buy back the shares.

Shares of Adani Enterprises fell 0.9% on Monday after falling 9.6% in early trade.

Adani Transmission fell 10%, while Adani Green, Adani Total Gas, Adani Power and Adani Wilmar fell 5%.

Adani Ports rose 9.3%, the only one to buck the negative trend.

The crisis has become the biggest business and reputational challenge for Adani, 60, whose fortune has soared in recent years as he expanded his conglomerate’s business interests, which range from ports to mining.

Both houses of India’s parliament were suspended on Monday for the third day in a row amid cries and calls for an investigation.

Following the Hindenburg report, Adani Group flagship company Adani Enterprises was last week forced to abandon a $2.5 billion share sale, and Adani lost his position as Asia’s richest man, sliding down the list of the world’s richest people.

(source: news.ro)