RAJAN POSES QUESTIONS TO SEBI ON ADANI FRAUD REPORT

Former Reserve Bank of India (RBI) governor Raghuram Rajan has questioned why the Securities and Exchange Board of India (SEBI) has not yet got to the bottom of ownership of the four Mauritius-based funds who are said to have parked 90% of their $6.9 billion in Adani group stocks.

The funds -- Elara India Opportunities Fund, Cresta Fund, Albula Investment Fund and APMS Investment Fund -have been under cloud for last couple of years over allegations that they may be shell companies. They came into focus again in January when a US short seller alleged that Adani Group used offshore shell companies to inflate stock price. Adani Group has repeatedly denied all allegations.

“The issue is of reducing nontransparent links between government and business, and of letting, indeed encouraging, regulators do their job. Why has SEBI not yet got to the bottom of the ownership of those Mauritius funds which have been holding and trading Adani stock? Does it need help from the investigative agencies?,” Rajan said in an email interview to news agency PTI.

Sounding a note of caution, Rajan said that India is “dangerously close” to the Hindu rate of growth in view of subdued private sector investment, high interest rates and slowing global growth.

Hindu rate of growth is a term describing low Indian economic growth rates from the 1950s to the 1980s, which averaged around 4 per cent. The term was coined by Raj Krishna, an Indian economist, in 1978 to describe the slow growth.

“My fears were not misplaced. The RBI projects an even lower 4.2 per cent for the last quarter of this fiscal. At this point, the average annual growth of the October-december quarter relative to the similar pre-pandemic quarter 3 years ago is 3.7 per cent. This is dangerously close to our old Hindu rate of growth! We must do better,” the former RBI governor said.