HomeLatest ArticlesAdani Group companies lost $100 billion in market value after Hindenburg Research...

Adani Group companies lost $100 billion in market value after Hindenburg Research report alleged stock manipulation

MSCI ESG Research said on Friday it had recently changed some of its environmental, social and governance ratings on Adani Group entities after the Indian conglomerate was caught in a storm of short selling in recent weeks.

Adani Group’s seven listed companies lost a combined more than $100 billion in market value after a January 24 Hindenburg Research report alleged stock manipulation and misuse of tax havens and indicated concerns about debt levels. Adani dismissed the concerns and denied any wrongdoing.

“On March 3, we downgraded our rating on the Hindenburg-related disputed cases to ‘moderate’ from ‘minor’ following new developments in the respective cases,” MSCI ESG Research said in a statement. It said the downgrade and resulting score changes did not result in any changes to each company’s overall ESG rating.

Entities rated by MSCI ESG Research include Adani Green Energy, Adani Power, Adani Total Gas, Adani Transmission and Adani Enterprises, according to the statement.

This week, MSCI ESG Research flagged all of its Adani Group entities for the accounting investigations metric, while some were flagged for the securities valuation metric, it said.

MSCI’s ESG Controversies scoring and labeling system alerts investors to potential reputational risks, according to a fact sheet produced by the agency. “Across Adani Group’s various entities, MSCI ESG Research has identified issues related to governance, board independence, related party transactions and controlling shareholders,” the company said.

Since the release of the short sale report, MSCI ESG Research has added questionable cases of “bribery and fraud” and “governance structures” to all Adani group companies to its coverage.

Adani Group did not immediately respond to a request for comment sent outside business hours. Company representatives have been meeting with fixed income investors for an international roadshow over the past two weeks. Last month, sustainability rating firm Sustainalytics downgraded corporate governance scores for some Adani Group companies.

MSCI ESG Research said on Friday it was closely monitoring developments in the Adani case, “including any related potential initiation of investigations by regulators or any ongoing developments related to governance structures, auditing and accounting practices.”

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