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In the midst of a banking crisis in the US, Adani Group CFO Jugeshinder 'Robbie' Singh took a jab at former US Treasury Secretary Larry Summers over his comments about the allegations against Adani Group being India's "Enron moment." In response, Singh called the current banking turmoil in the US the country's "3rd Enron moment."
Summers had urged current Secretary Janet Yellen and other top US regulators to pledge to back uninsured deposits in any banks that fail in the next year, which could help build confidence amid the current turmoil. This came after Yellen had called an unscheduled meeting of the Financial Stability Oversight Council, which includes Federal Reserve Chair Jerome Powell and other top regulators, against a backdrop of continued banking strains in the US and around the world, with Germany’s Deutsche Bank AG in focus on Friday.
Singh's Enron jibe referred to a Bloomberg interview in which Summers had said, “We haven’t talked about it on the show but there’s been a kind of possible Enron moment in India." Summers was referring to US short-seller Hindenburg Research accusing Adani Group of stock manipulation and improper use of tax havens, charges the company has denied. Hindenburg's Jan. 24 report eroded more than $100 billion in the value of listed Adani shares.
The term "America's Enron moment" refers to the scandal and subsequent bankruptcy of Enron Corporation in 2001, which exposed widespread accounting fraud and corporate malfeasance. Even though Singh didn't specify, America's second Enron moment could be the systemic crisis that swept through markets in 2008, taking down Lehman Brothers and prompting government bailouts of large financial institutions.
The US financial system suffered a major setback with the collapse of two US banks, including the Silicon Valley Bank, and Signature Bank. This triggered concerns among investors about other potential risks and led to a widespread sell-off in banking stocks. The resulting panic led to a sell-off in banking stocks and other financial assets, with investors seeking safer havens for their money. The collapse of these banks has also had ripple effects across the industry. The Credit Suisse Group AG was one of the hardest hit, and it faced significant challenges in its efforts to recover from the crisis. In response, UBS Group AG stepped in to acquire the beleaguered bank, hoping to prevent a more severe financial meltdown.
