India responds after Soros comments on fallout from Adani and PM Modi

NDIA – JANUARY 18: Prime Minister Narendra Modi with Gautam Adani, chairman and founder of Adani Group, and other delegates at Vibrant Gujarat Global Summit at Mahatma Mandir Exhibition cum Convention Center on January 18, 2019 in Gandhinagar, India .

Hindustan Times | | Getty Images

India has slammed billionaire investor George Soros after he claimed the Adani turmoil will weaken Prime Minister Narendra Modi’s grip on power and lead to a “democratic renaissance” in the country.

The latest dispute highlights renewed scrutiny over the relationship between India’s leader and business tycoon Gautam Adani, who has lost billions in net worth since a short sale report accused his companies of fraud. The Adani Group denied these allegations, calling the report a “calculated attack on India”.

Last week, Soros criticized the prime minister saying India was a democracy but Modi “is not a democrat”. Over the weekend, Indian Foreign Minister Subrahmanyam Jaishankar told a conference in Sydney that Soros’ comments were typical of a “Euro-Atlantic view” and dismissed his accusations.

“There are still people in the world who believe that their definition, their preferences and their opinions should take precedence over everything else,” said Jaishankar.

He added that there is “a debate and a conversation we should have about democracy”, including whose values ​​define a democracy as the world rebalances and becomes less Euro-Atlantic.

“He’s old, rich, headstrong and dangerous because what happens is when these people, these opinions and these organizations – they really invest resources in shaping narratives,” Jaishankar said in response to a question about the billionaire’s comments. .

India’s voters will decide “how the country should (be) run,” the foreign minister said.

“This concerns us. We are a country that has gone through colonialism. We know the dangers of what happens when there is outside interference,” added Jaishankar.

Modi-Adani ‘close allies’

Soros’ criticisms focused on the cozy relationship between Modi and Adani.

“Modi and business tycoon Adani are close allies; their fates are intertwined. Adani Enterprises tried to raise funds in the stock market but failed,” Soros said.

Both are from the state of Gujarat in western India. Adani was an early supporter of Modi’s political aspirations and championed the Indian leader’s vision of growth for the country. Modi flew an Adani jet after being elected to national office in 2014.

Adani's market losses have reached $100 billion in the week since being targeted by a short seller

But Adani lost his crown as Asia’s richest man in a matter of days after short-selling firm Hindenburg Research alleged fraud. The Adani Group denied wrongdoing and fired back at the company in a 400-plus-page rebuttal.

“Adani is accused of stock manipulation and his shares have collapsed like a house of cards. Modi won’t speak on the matter but will have to answer questions from foreign investors and parliament,” Soros said.

The billionaire predicted that Adani’s troubles would “significantly weaken Modi’s grip on India’s federal government” and “open the door to push for much-needed institutional reforms”.

“I may be naive, but I hope for a democratic revival in India,” Soros said.

The Hungarian-born investor is the founder of the Open Society Foundations advocacy network, through which he has donated more than $32 billion, according to his website. The network said it awards “thousands of grants every year to building inclusive and vibrant democracies,” with active projects in more than 120 countries.

Adani’s fall draws fire

Opposition critics also seized on Hindenburg’s report to attack Modi and his party ahead of national elections scheduled for next year. India’s main opposition party, Congress, staged protests and demanded an investigation into Hindenburg’s allegations.

However, the opposition party quickly distanced itself from Soros’ comments.

“Whether the PM-linked Adani coup triggers a democratic revival in India depends entirely on Congress, the opposition parties and our electoral process,” tweeted Jairam Ramesh, Secretary General of Congress. “It has NOTHING to do with George Soros.”

Politically, it is difficult to predict what effect, if any, Adani’s scrutiny will have on the popularity of Modi and his ruling Bharatiya Janata Party, observers said.

Still, the relationship between Modi and Adani is “so long and strong” that it will be difficult for the prime minister and his party to come out of this crisis unscathed, said Ashok Swain, head of the department of peace and conflict research at Uppsala University. in Sweden told CNBC recently.

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