Adani Crash- The AIDEM Cover Story

This is a compilation of developing events regarding the sordid Adani Crash saga. In a Cover Story consisting of many components, The AIDEM explores these developments in detail. The following are stories already published in this Cover Story package.

1. The exclusive AIDEM Interactions with Paranjoy Guha Thakurtha, the senior economic affairs journalist and writer whose many exposes on the Adani empire was referred to in the Hindenburg report. Watch here.
2. A timeline highlighting the growth of the Adani empire before and after 2014, the year in which the Narendra Modi regime began. Read here.
3. An important statement from the People’s Commission on Public Sector and Public Services, a public interest group consisting of eminent academics, jurists, erstwhile administrators, trade unionists and social activists. Read here.
4. Part 2 of the exclusive AIDEM Interactions with Paranjoy Guha Thakurtha. He dwells on the macroeconomic situation of India and points out that the Modi government’s policy trigger unrest in large sections of the population especially the poor, the youth and the unemployed. Watch here.
5. An article by Adv. VK Prasad on Cronyism in the Adani Group of Companies and how it helped in their expansion. Read here.

This is a timeline of major events that unfolded subsequent to the Hindenburg Report on the Adani Group of Companies.

August 31, 2023

The global investigative journalism network, the Organized Crime and Corruption Reporting Project (OCCRP), alleged in a report published on August 31, 2023, that money amounting to millions of dollars was invested in Adani Group’s publicly traded stocks via “opaque” funds which are based in Mauritius. OCCRP alleged that two men, Nasser Ali Shaban Ahli and Chang Chung-Ling, made these investments. These two have already been in the news for their close connection with Gautam Adani and his other family members. They had appeared in official records as directors and shareholders of a few affiliate companies of the Adani Group. The investment they allegedly made from the Mauritius funds is huge, amounting to $430 million, according to OCCRP. The Adani Group has refuted these allegations saying that “Soros-funded interests” and “foreign media” were working behind them. Financier and billionaire philanthropist George Soros is implied here. After the Hindenburg report had exposed a few of Adani Group’s reportedly shady financial operations, George Soros stated that India’s Prime Minister would have to answer questions from the foreign investors of Adani Group.

August 14, 2023

Deloitte, one of the world’s largest accounting firms, has resigned as the auditor of the Adani group’s port company. A few weeks before, Deloitte had expressed concern over certain transactions of Adani Port which was also flagged by the Hindenburg Report. As the news of Deloitte’s quitting came, all Adani stocks have fallen.   

March 01, 2023

• As the top officials of Adani Group are trying to allay investor worries by holding road shows across Asia, Adani stocks have picked up and added ₹30,000 crore m-cap. The gain is between 2% to 5%.  The investment arm of JPMorgan Chase & Co, UCITS ETF (JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF) has got rid of its 70,000 Adani shares (ESGs- green shares). Another JPMorgan-backed investor fund,  JPMorgan AC Asia Pacific ex Japan Research Enhanced Index Equity ESG UCITS ETF has also sold its ESG shares of Adani Group.

February 25, 2023

• Fresh reports are coming in about the frenzied selling of Adani shares as there are indications that Adani stocks might be pushed out of some important global indices. Morgan Stanley Capital International Indices (MSCI) are the most influential portfolio risk and performance-based indices and it is likely that Adani shares are dropped from some of these indices. The performance of a company’s shares in equity markets greatly depends on its listings in these global indices. 
• Between February 27 and March 1, top financial and corporate officers of the Adani Group are planning to engage with the company’s fixed-income investors in roadshows held across Singapore and Hong Kong. This engagement will focus on convincing the investors to refinance the upcoming debts of the Adani Group. Adani Green Energy’s $750 million bond, a debt taken from the overseas market, is due in September and the company has assured its investors that this bond will be refinanced one year ahead of maturity and a plan towards this will be placed before the investors by June.

February 24, 2023

• The LIC investments in Adani Group have turned negative, meaning the cumulative value of those stocks is now below their original investment value. LIC incurred losses of  ₹500 crore in the Adani fiasco. Since the Hindenburg report, LIC had maintained that their exposure to Adani Group stocks was only 0.975% and not a cause of worry.

February 23, 2023

• The Adani Group stocks continue to fall as its total market capitalisation has now reached below ₹8 lakh crore. The group has lost 61% (₹11.65 lakh crore) of market value since the Hindenburg revelation. Following this, Gautam Adani has further dropped to the 29th position in the Bloomberg Billionaire Index, making him only second to Reliance Industries owner Mukesh Ambani who is in the 12th position, among the 20 Indians in the list of the World’s richest 500 people.

February 22, 2023

• The Securities and Exchanges Board of India has asked Credit Rating Firms to provide the details of all ratings of local loans and securities availed by Adani Group. News reports suggest that SEBI could be trying to find out if the fall in Adani stock prices is likely to impact the company’s liquidity positions and debt repaying abilities.  
• The Guardian reported that many Australian retirement saving funds that invested in Adani Group stocks are at risk of exposure. These include the $ 243 billion Future Fund and The Australian Retirement Trust, with more than $200bn in assets, that are exposed to at least six Adani Group companies.

February 21, 2023

• Wikipedia has revealed that the Adani Group and its employees improperly edited Wikipedia entries about Adani Group, Gautam Adani and his family members. It also alleged that the editing carried out by the “paid editors” affected “a complete rewrite of the Adani Group article (on Wikipedia) which removed a conflict-of-interest notice from the top of the article” and that the IP address used has been identified as belonging to Adani Enterprises Limited. Wikipedia also said in its February 20, 2023 Disinformation Report that “billionaires have a history of apparent undeclared paid editing on Wikipedia” and that previously also many of them had hired people for “undeclared paid editing”.    

February 20, 2023

• Bloomberg reports that Norway’s largest pension fund, KLP, recently sold out all of its stocks of Adani Green Energy Ltd. in the backdrop of rumours that the ESG (Environmental, Social & Governance) investment in Adani Group’s green initiatives might have been redirected to its fossil fuel verticals. According to Bloomberg, across the globe, the investment funds committed to clean energy and holding Adani’s green energy stocks are expressing similar concerns.

February 18, 2023

• Despite the Hindenburg shocker, National Stock Exchange (NSE) added Adani Wilmer to the Nifty Next 50 and Nifty 100 indices. Similarly, NSE added Adani Power to the Nifty 500, Nifty 200, Nifty Mid Cap 100, Nifty Mid Cap 150, Nifty Large Mid Cap 250, and Nifty Mid Small Cap 400 indices.

February 17, 2023

• The Supreme Court said it would constitute an independent committee to review India’s company and stock regulatory mechanism. This decision comes in light of the irregularities suspected therein as pointed out by the Hindenburg report against the Adani Group. The Supreme Court also rejected the names presented by the central government to include in the probing panel in a sealed cover before it. The dollar bonds of Adani Group climbed up from distress levels after the company assured the investors that they would address all the debt maturities happening in the immediate future.

February 16, 2023

• Adani Group officially informed its investors that it would repay the debts nearing their deadlines by way of cash and private placement notes. The management also clarified that it was working to reduce the net debt of the group companies to a figure below three times its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in a year. The current level of debt is below 3.2 times EBITDA.

To read and view more from the Adani Crash Cover Story package, Click here.

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