Finance Minister Nirmala Sitharaman on Saturday said the government will let the regulators do their job when it comes to allegations of fraud against the Adani Group that have triggered an unprecedented sell-off in the stock market.
"Regulators will do their job. You've had the Reserve Bank comment on it yesterday. And prior to that, the banks and the LIC have themselves come out to say what their level of exposure is. So, the regulators will do their job," Ms Sitharaman said at a news briefing in Mumbai.
"And regulators are independent of the government... and they are left to themselves to do what is appropriate for keeping the markets regulated in prime condition. The SEBI (Securities and Exchange Board of India) has the wherewithal to keep that prime condition intact," she said.
The Finance Minister also swatted away questions about the Adani Group cancelling a fresh sale of shares in the wake of the stock crash, saying, "How many times have FPOs (Follow on Public Offers) withdrawn from this country and how many times has the image of India suffered because of that? And how many times have the FPOs not come back?"
Her statement comes after US short-seller Hindenburg Research, which makes money by betting on shares falling, accused the Adani Group last week of improper use of tax havens and stock manipulation, while also raising concerns over high debt levels.
The conglomerate has denied the accusations, saying the short-seller's allegation of stock manipulation has "no basis" and stems from an ignorance of Indian law.
Hindenburg's report has led to a stock rout in Adani Group's seven listed companies, which have lost more than $100 billion combined, or about half of their market value.
In the statement referred to by the Finance Minister, the Reserve Bank of India (RBI) on Friday said the country's banking system remains resilient and stable amid concerns about the risk to Indian banks from the collapse in Adani stocks.
"Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy. Banks are also in compliance with the Large Exposure Framework guidelines issued by the RBI," the central bank said.
Without naming the Adani Group in its statement, the RBI added it remains vigilant and continues to monitor the stability of the Indian banking sector.
The government has been under attack from the opposition, which has demanded a discussion in parliament and an investigation into the charges against the ports-to-energy conglomerate.
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