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print versionAdani Group’s heavy debt liabilities should not lead to the Finance Ministry forcing PSU banks to provide it relief at the cost of the public in India
by E A S Sarma
12/12/2024
To
Smt Nirmala Sitharaman
Union Finance Minister
Dear Smt Sitharaman,
I refer to my earlier letter of 23rd November 2024 addressed to you on the larger implications of the recent US District Court’s indictment of the Adani Group on their dubious role in firming up a regressive solar power agreement with the AP DISCOMs and the equally dubious role played by the concerned Central Ministries/SECI/SEBI/CBI etc., calling for an independent judicial enquiry.
More skeletons seem to be tumbling out of the Centre’s cupboard, as indicated in my subsequent letter of 6th December 2024 addressed to the Cabinet Secretary Evidently, as a sequel to the US indictment, the Adani Group may find it difficult to raise loans these days from external sources.
In this connection, I wish to refer to news reports that the “Adani Group has initiated talks with a clutch of investors and banks to refinance $1.1 billion worth of loans of Adani Green Energy Ltd (AGEL)……. The loans are up for repayment in March 2025….. apart from domestic financial institutions, the group has held talks with investors and lenders from West Asia, Europe and Japan for a private placement to refinance the loan”
The NDA government, instead of instituting an independent judicial enquiry into all issues linked to the Adani solar power sale , as suggested by some of us earlier, is dragging its feet in a desperate effort to adopt a defensive stance, perhaps at the Adani Group’s instance and trying to find all kinds of means to come to the rescue of that group. If it is so, it is unfortunate and against the public interest.
I apprehend, as indicated in the above-cited news report, that the Ministry of Finance, in its anxiety to bale out the Adani Group, will as usual force helpless PSU banks to extend refinancing facilities to that Group. I would caution both the Finance Ministry and the RBI not to move in that direction, as those banks, run on deposits from millions of rural and urban depositors and the tax-payers equity funds, already stand exposed to the extent of Rs 88,000 Crores, out of a total of Rs 2.41 lakh crores of debt liability of the Group as on 31st March 2024. The PSU banks are instead required to focus attention on priority sectors such as agriculture, rural development and small and marginal enterprises.
I hope that both the Finance Ministry and the RBI will exercise utmost prudence caution in dealing with the Adani Group.
Regards,
Yours sincerely,
EA S Sarma
Former Secretary to the Government of India
Visakhapatnam
E A S Sarma
