(Bloomberg) -- India’s parliament was adjourned for the day after pandemonium broke out when the upper house chair rejected opposition lawmakers’ demand for a debate on tycoon Gautam Adani’s tussle with a US short seller.
The opposition had formally asked Jagdeep Dhankhar, the chair of the upper house of parliament, to suspend regular business on Thursday. They wanted to discuss public sector investments in “companies losing market value endangering the hard-earned savings” of millions of Indians.
Dhankhar declined the request, saying their notification didn’t meet the requirements of the legislature. The upper house first adjourned until 2 p.m. and then for the whole day amid sloganeering.
Opposition lawmakers in the lower house then shouted slogans demanding a government response on the issue, resulting in pandemonium and the adjournment of the chamber until Friday.
Mallikarjun Kharge, president of the main opposition Congress, told reporters the opposing parties will also ask for an inquiry by a parliamentary or judicial panel.
This is an indication that Adani’s woes could well become a political headache for Prime Minister Narendra Modi, as he looks at a third term in office in elections due next year. Modi and the embattled Adani both hail from the western state of Gujarat and are widely perceived as being close. The tycoon has often aligned his businesses with Modi’s development goals, building capital-intensive infrastructure such as ports and airports.
On Wednesday, Finance Minister Nirmala Sitharaman’s annual budget speech was briefly interrupted by chants of “Adani, Adani” from the opposition benches.
Modi has said nothing on the matter so far. A top minister in his cabinet on Thursday said the economy will withstand the stock rout caused by allegations against the Adani Group and any impact on the broader equity markets is set to be short-lived.
While opposition lawmakers have come together to demand explanations on the matter, it remains to be seen if they can push Modi’s government — with its strong majority in parliament — to accede to their demands.
The stock rout in Adani’s beleaguered empire has intensified to more than $100 billion, as the fallout from Hindenburg Research’s fraud allegations pushed the Indian billionaire to pull a record equity offering and announce a review of his capital market strategy.
The stock plunged 28% on Wednesday, prompting the company to abandon a $2.4 billion follow-on share sale to insulate investors in the offering from potential losses. Shares in most of the nine other companies in the group also fell.
The group’s bonds also plunged to distressed levels, with banks either demanding more collateral for loans or scrutinizing the firms’ debt value to lend against.
(Updates with parliament adjourned for the day.)
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