Rahul alleges Modi, Shah ‘directly involved’ in stocks crash ‘scam’

New Delhi: Congress leader Rahul Gandhi, on Thursday, accused Prime Minister Narendra Modi and Home Minister Amit Shah of being “directly involved” in what he termed as the “largest stock market scam”. He claimed that retail investors suffered a loss of Rs 30 lakh crore due to the market crash following the Lok Sabha poll result. However, the BJP refuted his allegations as “unfounded”.

In response to Gandhi’s accusations, the BJP counter-accused him of attempting to frighten both domestic and foreign investors. The party stated that the stock market experienced a downturn when the Congress appeared to be gaining seats on the day of the poll result on June 4. However, it has started to recover as the government led by Prime Minister Narendra Modi is poised to secure a third consecutive term.

During a press conference, Gandhi called for a Joint Parliamentary Committee (JPC) investigation into the alleged “scam”. He demanded an inquiry into the supposed involvement of the prime minister, home minister, and Finance Minister Nirmala Sitharaman, alleging that they had recommended retail investors to purchase stock prior to the result, which he described as “unprecedented”.

Gandhi further claimed that Prime Minister Modi and Shah were aware of the number of seats the BJP was winning. However, they “artificially” inflated the stock prices with the assistance of “fraudulent” and “fictitious” exit polls. He alleged that when the actual result was announced on June 4, the markets plummeted, resulting in substantial losses for retail investors.

“The ordinary citizens of India lost Rs 30 lakh crore in the stock market on June 4...We demand a JPC investigation into this largest-ever stock market scam,” stated the former Congress chief.

He described this as a criminal act and demanded a JPC to investigate the involvement of the prime minister, home minister, and finance minister, and to identify the individuals who profited from this ‘scam’. He referred to those responsible for the exit polls.

Gandhi questioned whether such exit polls were actually conducted on the ground and the methodology used. He also inquired about the identity of these investors who invested large sums before the exit polls and profited when the stocks subsequently rose a day before the actual result.

Union Minister Piyush Goyal quickly responded by holding a press conference where he dismissed Gandhi’s demand for a JPC probe into the matter as “baseless”, stating that he continues to make pointless comments.

Goyal argued that domestic investors actually made money, while foreign investors suffered losses.

He stated that the Rs 30 lakh crore figure highlighted by Gandhi was a notional amount and did not pertain to trading.

Goyal cited the significant rise in the stock market under the BJP government to assert that retail and domestic investors benefited the most.

He suggested that Rahul Gandhi should be concerned about the fear of investors as the market crashed when the Congress was performing better than expected. Now, people are confident that the Modi government is returning, and the market has stabilised and is reclaiming its previous highs, Goyal said.

He expressed confidence that the reforms envisioned by the government will continue at a time when the country is poised for a bright future. “We are delighted that our allies are progressive and support reforms,” he said. They know what is good for the people of India and that the Modi government has taken the country to new heights, he added.

Gandhi earlier asserted that he was not speaking out of the air, saying, “we are confident that if an investigation is done, interesting things will be revealed and we think that the PM and home minister are directly involved in this.”

He claimed that when the actual result was way off the mark from the exit poll claims, the market crashed leading to loss of Rs 30 lakh crore to the retail investors.

He alleged that all this was deliberately and wilfully planned and executed. Gandhi claimed that the BJP knew that its seats were not going to be more than 220 from their internal survey and the feedback received from intelligence agencies, but despite that the exit polls were made to show that the BJP was winning a large number of seats.

Besides, he said, the interviews were carried out by channels “owned by Adani” and asked why did the PM and the home minister need to give investment advice which people are bound to take seriously, which they did, and later suffered huge losses.

Gandhi also posed a set of three questions, asking, “Why did the PM and home minister give specific investment advice to the five crore families investing in the stock markets? Is it their job to give investment advice to the people?”.

“Why were both interviews given to the same media house owned by the same business group, which is also under SEBI investigations for manipulating stock markets,” he also asked.

“What is the connection between the BJP, the fake exit pollsters, and the dubious foreign investors, who invested one day before the exit polls were announced and made huge profits, at the cost of five crore families?” Gandhi asked.

He claimed that it is for the first time that during polls, Modi, Shah and Sitharaman commented on the stock market.

“Why did the PM and home minister give investment advice to people,” Gandhi asked and claimed “BJP leaders had information that exit polls were wrong.”

“Quite interestingly, this has never happened before that the PM has commented on the stock market,” he claimed.

Asked whether he was linking Adani group, Gandhi said this is a broader issue than Adani’s. “It is connected to the Adani issue but it is much broader.

This is directly the Prime Minister of India and the home minister who are privy to data on the actual election results, who have the IB reports, who have their own data, and who are advising retail investors to buy stocks.”

He said the JPC is to investigate the role of the PM, home minister, of BJP members and also those who conducted these “fake” exit polls. Gandhi cited the chronology of events in which Shah said on May 13 that “buy shares before June 4” and on May 19, PM Modi said “stock markets will break records on June 4”.

The markets first rose on June 3 after exit polls, but crashed badly on June 4 when the actual result came. Rebutting the allegations, Goyal said Gandhi was desperate after the opposition alliance failed in its bid for power and Modi is set to start his third term.

He is now hatching a conspiracy to scare domestic and foreign investors from putting their money in India when the prime minister is working to make it the third-largest global economy, said Goyal.

When the exit polls were broadcast, it was foreign investors who bought expensive stocks while domestic investors sold. When the market crashed, it was the other way round, he claimed that domestic investors made money.

The market cap has now risen to Rs 415 lakh crore from Rs 67 lakh crore when the Congress-led UPA government demitted office in 2014, he said, adding that the valuation of listed public sector firms has gone up by four times.

The share of domestic investors in the market has gone up to 84 per cent from 79 per cent 10 years ago and this shows that they are the ones who have benefitted the most under the BJP-led NDA government, he said.

The size of the mutual fund industry has surged to Rs 56 lakh crore from Rs 10 lakh crore in this period, Goyal added.