@lilly159 Yes sure. It was mostly due to cash shrinkage because they wanted to earn from 30 year old safe government bonds. But this gives a fascinating Outlook at our Indian Banking, that means to ask if they're enough cash rich.
@lilly159 A more interesting local topic for Indians is the co-operative bank structure in India. Many a scam has been initiated and fostered via co-operative banks where one might be inclined to think that the co-operative bank structure itself is a scam trying to circumvent RBI regulations.
@resjudicata Cooperative banks are like the owners' piggy banks. It's weird they exist. After PMC collapsed, other cooperative banks didn't face a bank run and that's just wondrous.
@lilly159 We will never have an American-style run on the banks because the majority of Indian depositors overwhelmingly choose nationalised banks for their pension and savings account. Also, our monetary policy and quantitative controls are far-more interventionist, and for good reason.
The economic history of the USA is riddled with bank failures and runs on banks. We have rightfully steered clear of laissez-faire monetary policy.
@lilly159 Yes Bank is seriously a dreadful case. I remember your writing on AT1 bonds, that were told to be written off. If you read Economic Times, something similar is happening in takeover of Credit Suisse by UBS. They're doing some write offs. I particularly don't remember currently what are those. But that's very similar to Yes Bank in a way.
@sherithorb Yes those are AT1 bonds that are being written off in case of Credit Suisse. This eventually means that all the bond investors losing their money and having nothing but shareholders still having something!
Another way to look at this is that the accusations against Adani are of defrauding on price, not on assets. The assets that Adani companies own are real and tangible, there is no argument about it. The accusation of defrauding investors is about overpricing the assets, something that GQG seems to think is fine after the massive fall in share prices.
Are the allegations of just that? IMHO there are allegations of cooking up accounts books too, no? Won't that literally give 0 credence to any audit report or annual report regarding both assets and liabilities written in them?
@andrewl33 Yup there are accounting allegations too. I've chosen to focus on the price factor, because the accounting stuff is more like "hey this is unusual, why are you doing this". Bad, but maybe not outright fraud. Not denying there is a possibility of fraud there as well, just saying that Hindenburg couldn't particularly point out fraud there, more like irregularities.
@lilly159 In my view accounting shenanigans are the biggest hallmark of the quality of management. Profits can be illusionary if not backed by operating cash flows. Ultimately Free Cash Flow is what creates definitive shareholder value everything else can be massaged to suit quarterly whims
@resjudicata I agree, but that's something that an investor like GQG can independently evaluate. For instance, they can estimate the revenue coming in from, say, Mumbai Airport and take a call about investing in Adani Enterprises accordingly. Similarly for other assets.
@andrewl33 Aksath Damodaran Ji has pointed out, even the accounting firms they've selected haven't made much change. Also in India, auditing firms have special licenses which are hard to get. The main thing for such change, imo is cutting off a bit of money.
@lilly159 This is a pretty slippery slope tbh since governments can change. This "leniency" that they are talking about might just go away in 2024 elections
@lilly159 Rajiv Jain knows India is corrupt. He knows corrupt folks mostly win in India. He will make money on his bet. Modi is not going anywhere given the opposition parties are so disorganized. Most folks with common sense know how Modi and Adani are buddies.
