latest stock market gyrations largely inspired by stock route In a deep basket of key infrastructure and commodities, Adani Group focused on India’s regulatory environment in the last two trading sessions last week. market troubles of highly leveraged conglomerates, in the wake of a US-Based Short Sellerreport of alleging ‘stock manipulation and questionable accounting practices’Banking stocks, led by State Bank of India and even Life Insurance Corporation of India (LIC), pulled down significantly on Friday, raising investor concerns about the stability of the wider financial sector. While quoting sources in a media report, this has been said The Securities and Exchange Board of India (SEBI) has stepped up the investigation There has been no official statement from the market regulator regarding the group’s transactions. the group did Short seller’s allegations dismissed as ‘baseless and born out of malicious intent to defame and injure the reputation of the group’, and is weight of legal action, Irrespective of how the group can proceed to address the concerns raised in the short seller’s report as well as concerns of domestic investors, which appears to be concerning the group’s shares, SEBI and the Reserve Bank of India Including India’s regulators have an opportunity. liability, clearing the air by allaying fears of any widespread systemic contagion.
Even considering that the group’s shares do not have a significant presence or weighting on major benchmark stock indices, and private equity research reports sought to downplay concerns about the group’s overall exposure to the banking sector. Well, there can be little argument that the major state-owned banks and LIC are the main pillars of the country’s financial system. Given the extent of public trust in these companies in the form of savers’ deposits and life insurance policies as well as taxpayer resources that have been invested to keep PSU lenders adequately capitalised, the financial system regulator has already Will serve the interest. Emptyly conveying messages of reassurance. Regulators can enhance credibility in India as an investment destination not only by tightening listing requirements but more importantly by enforcement actions in case of serious violations of laws. The global debate on credit rating credibility that has come up from time to time, whether in the wake of the Asian financial crisis in the late 1990s, or the global financial crisis of 2007-08, is also a concern that India’s Regulators require it. reconnect with. At a time when India is chairing the G-20, the authorities must ensure that the regulatory framework is not seen in any less than the best light.